(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.

LINK:
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

(March 5, 2021) Staying focused on capital and liquidity, consumer financial protection, and diversity, equity and economic inclusion will achieve a vibrant economic outcome from the impact of the coronavirus crisis for everyone, including credit unions, the NCUA Board chairman said in a speech this week.

In recorded video remarks to the Credit Union Natl. Assn.’s (CUNA) annual Governmental Affairs Conference (GAC) this week, Chairman Todd Harper urged credit unions to pay careful attention to capital, asset quality, earnings and liquidity as they and their members emerge from the crisis. He urged credit unions to mitigate problems when they develop. And, as the pandemic evolves, he said his agency will continue to adjust its supervision and examination program to mitigate potential risks to the National Credit Union Share Insurance Fund (NCUSIF). He made no mention about a premium to be paid to the fund.

Harper also advocated for creation of a dedicated program to supervise for compliance with consumer financial protection and fair lending laws. He indicated that the agency, in 2020 exams, had found “notable shortfalls” in credit union compliance with the Fair Credit Reporting Act (FCRA), the Electronic Funds Transfer Act (EFTA) and the Truth in Lending Act (TILA).

He said creation of a dedicated consumer protection unit at the agency would “better protect consumers’ interests, ensure that the credit union system lives up to its commitment to serve members, and provide a comparable level of consumer protection oversight as federal bank regulators.”

However, he also said the agency would continue to focus on compliance with forbearance provisions of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act to help consumers facing difficulties spawned by the pandemic. “Whether it means reworking an existing loan due to financial stress, or delaying payments, the NCUA will not criticize a credit union’s efforts to provide prudent relief for members when such measures are conducted in a reasonable manner with proper controls and management oversight,” he said.

He told the group that – given the cooperative philosophy of credit unions – that each credit union “has a moral obligation to step up and help minority-owned businesses and communities recover and start anew in the months ahead.” He challenged the viewers to deliver more financial products and services “free of discrimination or unfair practices to people of color and within communities of color,” adding that such efforts will be “vital to ensuring a more equitable economic recovery.”

LINK:
NCUA Chairman Todd M. Harper Remarks before CUNA’s 2021 Governmental Affairs Conference

(March 5, 2021) Kudos to NASCUS Credit Union Advisory Council Member Brian Wolfburg, CEO of VyStar CU in Jacksonville, Fla., for introducing William “Bill” J. Bynum, CEO of Hope Credit Union and former Herb Wegner Award Winner from 2016, in a recorded message this week. The Wegner award, sponsored by the National Credit Union Foundation, is typically awarded to individuals whose words and deeds revolutionize the ways credit unions serve their communities. This year, in a bow to social distancing during the pandemic, the NCUF honored past winners, rather than in-person celebrations. VyStar sponsored Bynum’s presentation.