New NCUA chair sees continuing partnerships with states as ‘invaluable’

(Feb. 12, 2021) A continuing partnership with state supervisors “will be invaluable” to ensuring a viable dual-chartering credit union system, NCUA Board Chairman Todd Harper said in a webinar Thursday, his first public event as new leader of the agency

During the 90-minute event – billed as the “Chairman’s Webinar” – Harper outlined his priorities as chairman, which include a variety of other issues.

My whole heart is in the NCUA, its vital work, and the mission of the credit union system,” he said. In particular, he said he looked forward to working with credit unions and other key stakeholders in responding to the economic fallout caused by pandemic, positioning the agency to meet future challenges, and strengthening NCUA’s commitment to consumer financial protection.

More specifically, regarding his priorities, he cited capital and liquidity, consumer financial protection, cybersecurity, and diversity, equity and economic inclusion. “In the months ahead, these priorities will guide the agency’s decisions,” he said. He also said credit unions, in order to compete, must be able to safely and securely use technology to deliver member services and adopt financial innovations – but emphasize security and equity in providing those services.

We must also strengthen the agency’s consumer financial protection program to ensure that all consumers receive the same level of protection regardless of their financial provider of choice,” he said.

Referring to state regulators, the new NCUA chairman said the supervisors play an important role in ensuring safety and soundness. He said the dual chartering system is a “critical asset that helps the credit union system be dynamic and thriving.” A continuing partnership between NCUA and state regulators, as the credit union system addresses the economic fallout from the pandemic, he said, “will be invaluable.”

In other comments, Harper said:

  • CUs must live up to their mission of providing access for their members to credit and savings – including members of modest means. ”NCUA must do all that it can, then, to advance economic equity and justice,” he said.
  • In the aftermath of the killing of George Floyd last summer, the credit union system has an obligation to address racial justice directly and chart a better course for the nation’s future. “We especially must enhance support for minority deposit institutions, low-income credit unions and community development credit unions that are “on the front lines of serving the underserved “– as well as compliance with fair lending laws to counter discrimination in lending.
  • Future challenges, such as climate change, must also be addressed (since, he said, it disproportionately affects underserved communities).

Harper also noted issues on the horizon for the agency, which include finalizing the capitalization of interest rule, developing a rule to phase in the current expected credit loss (CECL) accounting rule, and exploring the impact of additional economic stimulus approved by Congress on net worth ratios.

In comments from NCUA staff during a questions and answer period of the event, it was noted that the rollout of the new MERIT exam program is delayed until the second half of this year. The impact of the coronavirus crisis was specifically pointed to as the cause.

Also, according to NCUA Director of Examination and Insurance Myra Toeppe (in response to a question submitted by a participant), a decision on an insurance premium has not yet been reached. She said the agency would be finalizing the equity ratio for the insurance fund first, and presenting that at the NCUA Board meeting next week. “We need to get the calculation finalized and then move on from there,” she said.

Presentation: NCUA Chairman’s Feb. 11, 2021 webinar