NFIB, Credit Union President Tell NCUA to Leave Climate Issues Alone

Agency says no regulations or strict guidance imminent despite report highlighting risks.

Weeks before comments on how climate change might affect credit unions are due, stakeholders are telling the NCUA the agency does not have the expertise to address the issue and should abandon efforts to do so.

“I think the higher priority of how the NCUA spends our money, is protecting us against eco-terrorism ideologies. IE: Alarmists and activists who are fighting against our democratic free-market capitalist society,” Doug Wadsworth, president of Tri-Cities Credit Union in Grand Haven, Michigan, told the agency.

Background and Context

The NCUA earlier this year solicited comments on how the agency should address climate-related issues. Board members made it clear that no regulations or strict guidance was imminent.

However, the agency also reported that one quarter of all federally insured credit unions are in communities that have a relatively high or very high risk of experiencing the negative effects of natural hazards. Together, those credit unions account for 34% of system-wide assets—or about $750 billion at the end of 2021, the report stated.

Where the NCUA Stands

Many Republicans, including two of the three members of the NCUA board, have said they oppose financial regulators taking action on the issue. However, the term of one of those two Republicans, Rodney Hood, expires in August, and presumably President Biden will nominate a Democrat to replace him.

Chairman Todd Harper, a Democrat, has taken a more activist position on climate issues and with Democrats potentially set to control the board, the agency could take additional action.

So far, the request for comment has garnered little reaction. However, the deadline isn’t until June 26 and interested parties generally file their comments at the last minute.

Inside the Comments

Wadsworth said simply that the agency should leave the issue alone.

“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 1 degree temperature change, spread out over the next 100 years,” he wrote.

The lobbying group representing small businesses agreed.

“Any climate-related financial risk issued by the NCUA should not apply to small and independent businesses and should not require credit unions to obtain climate-related information from such businesses,” David Addington, executive vice president and general counsel at the National Federation of Independent Business (NFIB), wrote in a separate comment.

The NFIB said that small and independent businesses cannot afford the cost of tracking climate-related information, adding that agency officials have admitted they do not have expertise in climate science.

“NCUA will need to acquire such expertise if it plans to prescribe regulations because of real, potential or perceived climate-related financial risk,” Addington stated.