GAC ’21: Hood: help for smaller CUs; Hauptman: ease path for chartering

(March 5, 2021) Watching closely to determine what additional support may be needed for smaller credit unions and minority depository institutions in the months to come as they face the continuing coronavirus crisis will be a priority for NCUA, NCUA Board Member Rodney Hood said this week.

At the same time, he and board Vice Chairman Kyle Hauptman agreed that the agency needs to loosen up chartering requirements so that more federal credit unions can be created.

In recorded remarks to the Credit Union National Association (CUNA) Governmental Affairs Conference, NCUA Board Member (and former Chairman) Rodney Hood said many financial institutions were left more vulnerable than they would otherwise have been due to the financial impact of the pandemic. “So closures of financial institutions, with the attendant systemic risks, are always a possibility,” he said.

Hood said, should closures occur, regulators need to be “prepared to respond appropriately to ensure the safety and soundness of the larger system,” and that it would always be his preference to save institutions rather than merging them.

In other comments, Hood said that moving forward with a new rule to expand lending authorities for credit union service organizations (CUSOs), which is now out for comment, is a priority for him. “This rule also would allow credit unions to invest in non-credit union owned fintech companies, something that I think is critical in today’s marketplace,” he said.

The NCUA board member also voiced support for “significantly” streamlining and simplifying the process of chartering new credit unions. NCUA Board Vice Chairman Kyle Hauptman, during his recorded comments at the conference, echoed Hood’s call.

There has got to be an easier path for de novo credit unions,” Hauptman said. “I’m from Maine, and I was pleased to hear about a new credit union chartered in my home state just last year— until I learned it took nine years to accomplish. Nine. Things may move a bit slowly in Maine, sure, but not that slowly. Self-reliant, accountable people who want to work cooperatively with others to charter a new credit union that they will own, deserve a clear path to make that a reality.”

Hauptman said he intends to talk to persons who have recently started a credit union and those who want to start one. He said his goal is to work with NCUA staff on a new, easier path for creating new credit unions.

NCUA Board Member Rodney E. Hood Remarks before CUNA’s 2021 Governmental Affairs Conference

NCUA Vice Chairman Kyle S. Hauptman Remarks before CUNA’s 2021 Governmental Affairs Conference