NCUA Letter 20-CU-12
May 6, 2020
Credit unions are continuing to focus on their operations, while also monitoring their liquidity and credit risk to try to understand their exposure in light of the pandemic. The NCUA appears to be on the same track.
Last week, the NCUA released Letter 20-CU-12 – Outreach Related to COVID-19 Impact, asking credit unions to answer a number of questions about operations, liquidity, and credit risk.
As you respond to the NCUA’s request, we thought our blog article, Liquidity Has Two Faces – Don’t Get Burned By The One You Haven’t Seen For A Long Time, and c. myers live – Preparing For A Liquidity Crunch, may be helpful for you to not only address regulatory questions but also think through business needs and issues.
Keep in mind when answering the questions, it is beneficial to include your rationale. For example, if you choose to borrow for strategic reasons versus liquidity needs, this reasoning would be important for the examiners to know.
This type of communication can help the dialog become more focused on what is important for your unique situation.