Don’t penalize ag over climate change concerns, North Dakota Gov. Doug Burgum warns credit union agency

North Dakota Gov. Doug Burgum and Dakota Credit Union Association CEO Jeff Olson both submitted public comments to the National Credit Union Administration expressing concern about a portion of the NCUA’s draft strategic plan that seems to suggest that credit unions working with agriculture could be a financial liability due to climate change.

Doug Burgum stands at a brown podium with the North Dakota Stockmen's Association logo while wearing a dark-colored sport coat.
North Dakota Gov. Doug Burgum has urged the National Credit Union Administration to remove language from a draft strategic plan that could limit credit unions from working with farmers and ranchers.
Emily Beal / Agweek file photo
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BISMARCK — Don’t use climate change as an excuse to make credit unions quit working with farmers and ranchers, North Dakota Gov. Doug Burgum has urged the National Credit Union Association.

The National Credit Union Administration, an independent federal agency that insures deposits at and regulates credit unions akin to how the Federal Deposit Insurance Corporation regulates banks, in recent months released its multi-year strategic plans that “outline the NCUA's strategic and performance goals along with the critical factors that affect the achievement of these goals.” Monday, Jan. 24, was the deadline to submit public comment on the proposed strategic plan before the NCUA Board considers it for final adoption.

Both Burgum and Jeff Olson, the CEO of the Dakota Credit Union Association, expressed concern in their public comments about a portion of the NCUA strategic plan that urged credit unions to consider diversifying their clientele if a large portion of the clientele is at risk of suffering a negative impact from climate change. Agriculture was included as an example of an industry that could be impacted.

“Given our administration’s goal of North Dakota becoming a carbon neutral state by 2030, we appreciate NCUA’s concern about climate change,” Burgum wrote to the NCUA Board in a public comment on its draft plan . “However, carbon neutrality can be achieved only through innovation, not regulation — and certainly not by limiting access to credit for agricultural operations with natural carbon storage capacity.”

Olson agrees. The Dakota Credit Union Association is the professional financial trade association serving 69 credit unions in North Dakota and South Dakota.


“NCUA's Strategic Plan draft is a direct attack on Dakota credit unions that support ag and livestock producers and the energy sector businesses,” he wrote in a recent newsletter to his organization's membership .

An NCUA spokesperson said the NCUA Board will take all public comments under consideration and will evaluate revisions to the draft at an upcoming Board meeting.

NCUA Chairman Todd M. Harper in a statement denied that the strategic plan would keep credit unions from lending to agricultural producers.

“The NCUA will not micromanage any lending for climate financial risk. This includes lending to family farms and others in the agricultural sector, as well as businesses tied to the fossil fuel industry," he said. "Moreover, any change in NCUA policy and supervision related to climate financial risk must be agreed upon by NCUA Board action.”

An excerpt from the National Credit Union Administration's draft strategic plan for 2022-26 reads: "Climate-Related Financial Risks
Climate change is accelerating and the number – and cost – of climate-related natural disasters is
rising. The economic effects of these events are clear. Each year, natural disasters like hurricanes,
wildfires, droughts, and floods impose a substantial financial toll on households and businesses
alike. The physical effects of climate change along with efforts to address climate change and
transition to a low-carbon economy pose significant risks to the U.S. economy and the U.S.
financial system.
Credit unions need to consider climate-related financial risks and how they could affect their
membership and institutional performance. For instance, a credit union’s field of membership is
often tied to a particular industry or community. Some industries, like the energy and auto
industries, may be disproportionately affected by climate change and the transition away from fossil
fuels towards renewable forms of energy. Changing weather patterns will disproportionately affect
farming communities. Over time, climate change will likely affect the value of collateral, including
homes and vehicles. To remain resilient credit unions may need to consider adjustments to their
fields of membership as well as the types of loan products they offer. Efforts to combat climate
change will likely give rise to new regulations, potentially increasing costs for credit unions as they
adapt and respond.
Climate change presents several complex conceptual and practical challenges not only for credit
unions but also for the NCUA. The agency will need to adapt its risk monitoring framework to
account for climate-related threats to financial stability, the credit union system, and the Share
Insurance Fund. "
An excerpt from the National Credit Union Administration's draft strategic plan for 2022-26 mentions agriculture as an industry that could be adversely impacted by climate change.
Courtesy / National Credit Union Administration

A section in NCUA’s “Draft NCUA Strategic Plan 2022-2026,” titled “Climate-Related Financial Risks,” includes the 35-page document’s only mention of agriculture, farming or ranching. The section considers the financial impacts of climate change, including physical damages and changing regulations that could affect the viability of certain industries. The language was not included in NCUA’s previous strategic plan, which did not mention farming, ranching or agriculture.

The Climate-Related Financial Risks section explained that credit unions often are tied to particular industries or communities, and if those industries or communities have severe impacts from climate change or regulations aimed at cutting the effects of climate change, the credit unions could suffer.

“To remain resilient credit unions may need to consider adjustments to their fields of membership as well as the types of loan products they offer,” the draft said.

Also mentioned in the section as examples of industries that could be impacted were the energy and auto industries. The energy and auto industries, the draft said, may be hurt or changed by moves away from fossil fuels. The alluded-to impact on agriculture was more of a physical nature.


“Changing weather patterns will disproportionately affect farming communities. Over time, climate change will likely affect the value of collateral, including homes and vehicles,” the draft said.

In his letter, Burgum noted that North Dakota’s 34 credit unions have 214,000 members and currently hold $748 million in agricultural loans, accounting for roughly one-quarter of their loan portfolios on average. Agriculture “should be viewed as an industry uniquely positioned to capture and store carbon,” he stated, warning that discouraging ag lending would be counterproductive to carbon reduction goals.

“The plan’s proposed draft language under ‘Climate-Related Financial Risks’ is ill-conceived, politically motivated, anti-agriculture rhetoric that threatens to cause serious harm to the farmers and ranchers who form the backbone of rural America,” Burgum continued. “We strongly urge that it be stricken from the proposed draft or significantly revised to encourage agricultural lending.”

Dakota Credit Union Association also filed a public comment related to the NCUA strategic plan on Jan. 24 , in which Olson asked that NCUA “take a more thoughtful approach to the topic of climate-related financial risk and carefully study any potential correlation between climate change and risk to the credit union industry.”

“DakCU is very concerned for small credit unions whose field of membership only encompasses rural/agricultural communities. If concentration limits were imposed, this would threaten the very existence of small rural community credit unions,” Olson’s comments said. “DakCU would strongly resist any regulatory initiatives that might seek to prevent credit unions from serving the agricultural industry.”

In an interview Tuesday afternoon, Olson said some of his organization’s concerns already are playing out, with some credit unions in good standing that have large ag portfolios being moved from 18-month exam cycles by the NCUA to 12-month cycles. The NCUA is tasked with making sure credit unions are on sound financial ground, and examiners have indicated to the institutions that they do not understand ag lending, he said. However, Olson said many credit unions in North Dakota were chartered to serve agriculture and rural communities, and that has been a strong business plan.

“I don’t recall any ag loans in the Dakotas ever negatively impacting the Shared Insurance Fund,” he said, noting that North Dakotas has 12 of the top 20 ag lending credit unions in the country.

Dakota Credit Union Association has invited Harper to visit the Dakotas so he can see firsthand the work the credit unions do with agriculture, but Olson said that invitation has not been accepted yet.


Olson is not optimistic that his comments or those of Burgum and other officials from around the region will change the outcome in the strategic plan.

“The likelihood of us changing that is slim and none,” he said.

However, he noted that Sen. Kevin Cramer of North Dakota and Sen. Mike Rounds of South Dakota serve on the Banking Committee that has oversight over the NCUA, and Sen. John Hoeven of North Dakota is the ranking member on the Senate Ag Appropriations Committee, and he said those officials can help make sure credit unions can continue doing business in agriculture.

Jenny Schlecht is the editor of Agweek and Sugarbeet Grower Magazine. She lives on a farm and ranch near Medina, North Dakota, with her husband and two daughters. You can reach her at or 701-595-0425.
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