There Are Reasons for Optimism - Rodney E. Hood

By Rodney E. Hood

Last week, as I prepared to receive my COVID-19 vaccination, I marveled to think of how far we’ve come in just the last year.

The public health emergency that arose in early 2020, spiraling into a full-on pandemic crisis by March of last year, was unlike any challenge we’d faced in recent memory. Our understanding of the virus as it spread was limited; as the sense of uncertainty and foreboding mounted, the forecasts of the pandemic’s full impact were anything but reassuring. The potential threat to human life, to our economy and to our way of life was difficult to calculate. Virtually overnight, we had entered a new environment of risk that required clear thinking and rapid decision-making.

A key lesson we can take from last year’s events is that there are few qualities more important in a time of adversity than resiliency – the ability to withstand and respond to stress. The last year has been a critical test of our system’s resiliency, and while that test certainly exposed weaknesses that need to be addressed in our society, it also revealed great strengths.

I was encouraged and inspired to see how effectively the agency’s workforce responded to the serial challenges we confronted. As we shifted to an off-site work posture, NCUA employees adapted swiftly to execute our regulatory mission with professionalism, creativity and purpose. We adopted modified examination methods, enacted various regulatory reforms to respond to the pandemic, and took care to communicate clearly with all stakeholders as to any adjustments – all with an eye toward ensuring the safety and soundness of this vital industry.

Prudent Moves

Meanwhile, credit union industry leaders and employees responded effectively to ensure that their members and communities were served. They made prudent moves to keep employees and members safe without disrupting access to financial services while also working with credit union members impacted by the coronavirus and the economic fallout   

When the Coronavirus Aid, Relief, and Economic Security Act was enacted last year, credit unions made more than 171,000 loans to entrepreneurs and small businesses that were in urgent need of capital to keep their doors open.

As a result of those moves, the initial economic damage from the pandemic was severe, but we at least managed to mitigate it. To be sure, we’re not out of the woods yet: we still have a long way to go to restore what’s been lost in terms of jobs, small business and local investment. We’re paying close attention to what additional support might be needed for smaller credit unions and minority depository institutions, because we know they are still vulnerable to additional shocks. Moreover, I’ll be looking closely at any additional regulatory relief that the NCUA Board could undertake to help credit unions to meet their members’ needs more effectively, especially as the shift to digital banking has increased because of the pandemic.

And we still have a great deal of work to do to address the challenge of financial inclusion for all Americans, which last year we identified as a critical priority that credit unions and the larger financial services industry should work to advance. I’m proud of the work that we did to launch the Advancing Communities through Credit, Education, Stability and Support initiative (ACCESS), and I look forward to working with my fellow Board members, NCUA staff and the industry to continue advancing those vital priorities.  

I’ll again emphasize that, when it comes to beating the pandemic and steering the economy toward fuller recovery, we still have a long way to go. But with the progress we’ve made at detecting, treating and preventing the spread of the virus, and with the slow but steady progress we’ve seen in stabilizing the economy, we’re on much steadier footing today than we were even a few months ago.

Challenges Remain

The challenges are still with us – but we have made undeniable progress. Many of you may be familiar with Winston Churchill’s famous quote from 1942, as British forces finally began to turn the tide in World War II. The prime minister reminded his people that “this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

As that quote reminds us, in any struggle, we should be hopeful and optimistic that we will prevail – but hope and optimism have to be earned, so we should move forward with a sense of clarity and reality, recognizing that we still have much hard work and many challenges ahead. And we should recognize that credit unions are well positioned to respond to the needs at this important time in history.  

While we know we have a long road and much hard work ahead of us, that progress is reason for hope and optimism—and a sure sign that we’re on the right track.

Rodney E. Hood is a member of the NCUA Board