ORLANDO, Fla.–NCUA Board Member Rodney Hood told credit unions here that if there is a lesson from the last year it was summed up in a meeting breakout session title: “Transitioning from Risk to Resilience.”
“That title stood out to me, because in five simple words it sums up the journey we’ve taken since March 2020, doesn’t it?” Hood said in comments to the League of Southeastern Credit Unions’ annual meeting here.
After referencing some of the events since the pandemic shut down the economy, Hood told attendees, “Our nation has faced many challenges in our lifetimes, but few compare to what was unfolding before our eyes this time last year.”
Hood said the “resilience” of credit unions can be seen in the latest data, with federally insured credit unions reporting net income growth of $11.3 billion, an increase of 134.9% over the year ending in the first quarter of 2021 (a figure boosted by CUs reducing their allowances for loan losses).
The Reality
The good news and the desire to “return to normal,” however, said Hood, should not lull CUs into a “sense of complacency. Because the reality is, we still have a lot of work to do to rebuild after the challenges of last year – because for too many people in our society, things are still a long way from normal.”
As an example, the former NCUA chairman pointed out that while many people have been able to shift to working from home, many others have not, resulting in job losses and, if still working, being exposed to COVID.
“Let’s be blunt here: a lot of us were blessed in that we didn’t have to miss a paycheck, and we did not have to truly bear the full brunt of the economic contraction,” Hood said. “But there are a great many people who are still not back to normal after what was lost last year, and we need to make it a priority to help them regain their footing in this recovery.”
The Question
The question now, said Hood, is what can credit unions do to continue to contribute to the economic recovery?
“I have argued that we need to make financial inclusion a top priority for the financial services industry as a whole,” said Hood. “You might have even heard me say that ‘financial inclusion is the civil rights challenge of our generation.’ I say it all the time, and I’ll keep saying it, because it’s that important.”
Hood cited NCUA’s ACCESS initiative, created while he served as chair, as one effort to enhance inclusion in the CU community. He also credited current NCUA Chairman Todd Harper with continuing the focus.
Looking Forward
Looking forward, Hood said his agenda includes:
After referencing some of the events since the pandemic shut down the economy, Hood told attendees, “Our nation has faced many challenges in our lifetimes, but few compare to what was unfolding before our eyes this time last year.”
Hood said the “resilience” of credit unions can be seen in the latest data, with federally insured credit unions reporting net income growth of $11.3 billion, an increase of 134.9% over the year ending in the first quarter of 2021 (a figure boosted by CUs reducing their allowances for loan losses).
The Reality
The good news and the desire to “return to normal,” however, said Hood, should not lull CUs into a “sense of complacency. Because the reality is, we still have a lot of work to do to rebuild after the challenges of last year – because for too many people in our society, things are still a long way from normal.”
As an example, the former NCUA chairman pointed out that while many people have been able to shift to working from home, many others have not, resulting in job losses and, if still working, being exposed to COVID.
“Let’s be blunt here: a lot of us were blessed in that we didn’t have to miss a paycheck, and we did not have to truly bear the full brunt of the economic contraction,” Hood said. “But there are a great many people who are still not back to normal after what was lost last year, and we need to make it a priority to help them regain their footing in this recovery.”
The Question
The question now, said Hood, is what can credit unions do to continue to contribute to the economic recovery?
“I have argued that we need to make financial inclusion a top priority for the financial services industry as a whole,” said Hood. “You might have even heard me say that ‘financial inclusion is the civil rights challenge of our generation.’ I say it all the time, and I’ll keep saying it, because it’s that important.”
Hood cited NCUA’s ACCESS initiative, created while he served as chair, as one effort to enhance inclusion in the CU community. He also credited current NCUA Chairman Todd Harper with continuing the focus.
Looking Forward
Looking forward, Hood said his agenda includes:
- Regulatory reform
- Support for smaller credit unions and minority depository institutions
- Streamlining and simplifying the chartering process for new credit unions (He noted only one new charter was granted in 2020 and only two are planned for this year).
- Attention to addressing the affordable housing crisis
- Looking “very seriously” at what more can be done to develop a constructive regulatory framework for financial technology. “I’ll be especially interested in seeing how we can deploy these tools to help the under-served, the marginalized, the unbanked, those without access to financial services. I want to encourage you all to explore the potential and possibilities of these tools, and as a regulator, I want you to have the flexibility to do so, and I don’t want our examiners penalizing you for putting these digital tools to work on behalf of your members,” he said.
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