Climate Advocates Call for NCUA to Establish ‘Resilience Office’

The NCUA should fund a Climate Resilience Office as part of its 2024 budget, environmental, progressive and consumer groups told the agency this month.

“Climate resilience staff are necessary for the NCUA to systematize disaster recovery, climate resilience, and green lending opportunities for credit unions and their communities, including in coordination with other agency and Administration effort,” Americans for Financial Reform Education Fund, Green America, the National Coalition for Asian Pacific American Community Development, the National Fair Housing Alliance, New York Communities for Change, Public Citizen, and The Greenlining Institute wrote, in a letter commenting on the agency’s draft 2024 budget.

Inclusive agreed, with President/CEO Cathleen Mahon saying that the office could assist individual credit unions in dealing with climate-related issues.

Comments on the draft 2024 budget were due last week. The comments were posted on the “regulations.gov” website Monday.

Opposition to Climate Focus

While some groups called on the agency to increase its spending on climate issues, the two national credit union trade groups have said that the proposed 2024 NCUA budget already is too high. They also contend that the NCUA’s increased focus on consumer protection issues is unwarranted.

And Republicans on Capitol Hill have told federal financial regulators that they should not deal with climate issues, saying that they should concentrate on safety and soundness issues facing the institutions they regulate.

Members of the NCUA board have said that climate change is an issue for individual credit unions to address, although the agency issued a request for comment on the issue.

Joint Letter

Americans for Financial Reform and the groups signing the joint letter also said the NCUA should develop a climate risk and resilience toolkit and guidance on fair lending laws, climate resilience for members and green lending.

They said the agency should update examiner training and examinations to take into account climate risks and develop climate scenario analysis for the largest credit unions.

Green Lending

Mahon noted that many credit unions offer “green loans” to finance clean energy projects.

She said that credit union “green lending” is likely to increase next year because the Inflation Reduction Act designated $27 billion through the Greenhouse Gas Reduction Fund for community-based lenders, such as credit unions.

She added that if the agency increases its focus on consumer protection issues, officials should include green lending consumer protection in those efforts.

“Specifically, by establishing a dedicated fund to provide technical assistance to small and MDI credit unions and offering guidance on implementing and enhancing consumer protection measures related to green lending,” she wrote.

Clean Energy Credit Union

Officials from one credit union, the Clean Energy Federal Credit Union criticized the NCUA for not including any mention of climate issues in the budget document.

Credit unions involved in clean energy face many challenges, with some stemming from the absence of guidance and support from the NCUA, they said. Those challenges include a lack of expertise on the part of examiners, officials from the Englewood, Colo.-based credit union wrote.

“By dedicating funds to support credit unions prioritizing climate resilience and green lending efforts the NCUA can help credit unions better serve their members and contribute to building a sustainable and environmentally conscious financial sector,” they wrote.

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