Submit feedback on NCUA’s prohibition of reputation risk

Credit union stakeholders are encouraged to comment on the NCUA’s proposal to remove reputation risk from its examination and supervision program. The proposal is highlighted in America’s Credit Unions’ latest Regulatory Comment, and follows consistent advocacy efforts in support of this change by America’s Credit Unions, leagues, and credit unions this year. 

The removal of reputation risk from the supervisory framework will allow NCUA examiners to focus on concrete, measurable core financial and operational risks rather than subjective perceptions. Credit unions will ultimately benefit from greater examination consistency. 

The proposed rule would prohibit NCUA from:

• Criticizing, formally or informally, rewarding, using in its decision-making process, or taking any adverse action against institutions based on reputation risk (defined as the risk that an action of an institution could negatively impact its public perception for reasons unrelated to its financial or operational condition); and
• Requiring a credit union to close an account or to refrain from providing an account, product, or service based on political, social, cultural, or religious views and beliefs, constitutionally protected speech, or bias against lawful, but politically disfavored, businesses.

Comments are due to America’s Credit Unions by Dec. 8 and to the NCUA by Dec. 22. 

Read the Regulatory Comment