NCUA Makes Pandemic-Era Lending Rules Permanent, Targets More Regulations For Elimination

 ALEXANDRIA, Va.—NCUA is making permanent pandemic-era rules governing Paycheck Protection Program loans, eliminating an unnecessary provision involving credit unions’ statutory lien authority and proposing to scrap an outdated commercial lending regulation as part of the 14th round of its ongoing Deregulation Project.

The agency announced the two final rules and one proposed rule Tuesday, continuing its effort to eliminate outdated requirements and simplify regulations while maintaining credit union safety and soundness.

The proposal includes:

12 CFR 723.9 – Transitional Provisions (Commercial Lending)

NPRM Summary 

NCUA said it is seeking public comments on an interim final rule that removes 12 CFR 723.9, an outdated transitional provision in the commercial lending regulation. The provision was adopted as part of the 2016 commercial lending rule to address credit unions operating under certain NCUA-approved waivers or supervisory actions during the transition to a principles-based regulatory framework. The board said it has determined that the provision has served its purpose and is no longer necessary. Removing it would reduce regulatory complexity and improve the clarity of NCUA's regulations. 

The two final rules NCUA announced are:

12 CFR Parts 702 and 723 – Treatment of Paycheck Protection Program Loans

The board adopted a final rule that makes permanent the regulatory treatment of Paycheck Protection Program (PPP) loans that have been in place since April 27, 2020. These provisions were originally adopted during the COVID-19 pandemic to implement the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  

12 CFR 701.39(a)(1) – Definitions Related to Statutory Liens

The board also amended 12 CFR 701.39 by removing paragraph (a)(1), which defined the phrase "except as otherwise provided by law or except as otherwise provided by federal law." The board said it determined that the definition was unnecessary because credit unions are already responsible for identifying and complying with applicable laws when exercising their statutory lien authority. This change does not affect a credit union's statutory lien authority or existing legal obligations, NCUA added.

Find a detailed summary for each proposal at https://ncua.gov/news/deregulation-project/. To submit comments, type or paste the docket numbers into the search on the Federal Rulemaking Portal.