NCUA official seal. Credit/NCUA
Officials with NAFCU, CUNA, credit unions and banking groups, and a few anonymous people, filed comments by Monday's deadline for the NCUA's request for information (RFI) from credit union stakeholders about their thoughts on any climate-related risks that might impact the credit union industry.
The RFI, according to the NCUA, was not in any way signaling a proposed policy change. In April, board members voted 2-1 in favor of officially asking credit union stakeholders for their "comments on opportunities to enhance its supervision and regulation of each regulated entity's management of such risks."
As part of in the 42 comments filed with the NCUA, NAFCU Senior Regulatory Affairs Counsel James Akin recognized the issue of climate change potentially impacting credit unions, but asked the NCUA to avoid issuing any proposed regulation on the issue unless directed by Congress.
Akin wrote, "Each credit union is unique, with its own set of characteristics, membership demographics and geographical locations, resulting in varying risk profiles when it comes to climate-related risks. It is important to recognize that the impact of climate change and natural disasters can differ significantly across regions and communities. Therefore, proposing comprehensive regulations that would force all credit unions to comply may not be appropriate or effective. The NCUA should consider the diverse nature of credit unions and the specific risks they face and defer to the judgment of each credit union's leadership regarding their risk management strategy."
CUNA Senior Director of Advocacy and Counsel Luke Martone appeared to take a stronger stance against the NCUA even considering any rulemaking or regulatory activity in the area of climate-related financial risk.
Martone wrote, "We wholeheartedly oppose any subsequent regulatory activity that would establish mandatory reporting procedures for credit unions or to otherwise prevent credit unions — directly or indirectly — from continuing to make independent business decisions as they deem most appropriate in order to serve their members. Credit unions know their operations, fields of membership, individual members and potential risks best, certainly better than the NCUA, which appropriately focuses on the industry on a broad scale."
CUNA added that if the NCUA feels compelled to take further steps into climate-related financial risks, "it should be limited to informal guidance or educational resources."
Martone wrote, "The NCUA should focus on providing credit unions with the resources they need to manage climate-related financial risks, rather than imposing any new regulations that will only hamper their ability to continue serving their members."
One person, only listed as "Anonymous," commented, "The role credit unions should play is to fund consistent sources of energy at market prices, not to subsidize intermittent energy sources that ultimately lower the global standard of living."
In comments filed by Doug Wadsworth, president/CEO of the $72 million Tri-Cities Community Federal Credit Union in Kennewick, Wash., said, "When it comes to spending money and resources, I think the NCUA should stick to helping credit unions be financially strong and resilient, by better serving members in a rapidly changing technological world: We need to worry much more about how digital currency or AI will hurt us, rather than a one degree temperature change, spread out over the next 100 years."
When the NCUA announced the RFI in April, NCUA Chairman Todd Harper said, "The answers we receive may also allow us to discern what tools credit unions would like to have to assist them in effectively monitoring, managing and mitigating climate-related financial risks."
It's unclear when NCUA board members might discuss the findings from the RFI.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
