WASHINGTON — National Credit Union Administration Chairman Kyle Hauptman told members of the House Financial Services Committee on Thursday that the nation’s credit union system remains financially strong, while warning that rising delinquencies and consumer financial stress continue to warrant close monitoring.
Hauptman also responded to a handful of questions from members of Congress, as well.
Hauptman appeared as part of the regular hearings on Oversight of Prudential Regulators. Also appearing as witnesses were Michelle Bowman, vice chair for supervision with the Federal Reserve; Travis Hill, FDIC chairman, and Jonathan Gould, the acting Comptroller of the Currency.
In his prepared statement, Hauptman said federally insured credit unions remain well-capitalized and continue to meet members’ borrowing needs despite economic headwinds. He said the NCUA is focused on maintaining safety and soundness, protecting the National Credit Union Share Insurance Fund and creating opportunities for credit unions to innovate responsibly.
Update on CU Performance
Hauptman told the committee federally insured credit unions held approximately $2.4 trillion in assets and $1.7 trillion in outstanding loans as of the third quarter of 2025. He said the system’s aggregate net worth ratio stood at 11.24%, while 82% of federally insured credit unions carried composite CAMELS ratings of 1 or 2, indicating strong overall financial condition.
Hauptman also told lawmakers that share growth strengthened during the year and that credit union earnings remained sound, with a return on average assets of 0.81%. He noted that net interest margins improved as loan yields increased.
At the same time, Hauptman said the NCUA continues to monitor signs of financial stress among consumers. He pointed to rising loan delinquencies, noting that the delinquency rate for total loans and leases reached 0.95% in the third quarter of 2025. He also said charge-off rates remained elevated compared with historical norms, although they had moderated slightly from recent peaks.
One Relative Bright Spot
Hauptman said mortgage lending has been a relative bright spot for credit unions. According to his prepared testimony, credit unions increased mortgage lending during the past year despite a sluggish housing market and weak home sales. He said credit unions have been successful in expanding their mortgage portfolios relative to other lenders.
The chairman also addressed concerns surrounding commercial real estate. While acknowledging continuing stress in the sector due to interest rates and occupancy challenges, Hauptman said credit unions generally maintain limited exposure to commercial real estate lending. He said the agency continues to closely monitor institutions with significant concentrations in that area.
Regulatory Update
On the regulatory front, Hauptman told lawmakers that the NCUA is pursuing efforts to reduce unnecessary regulatory burden while maintaining appropriate supervision. He said the agency’s ongoing deregulatory review is intended to eliminate obsolete requirements and provide greater regulatory clarity for credit unions.
Hauptman also highlighted the agency’s efforts to encourage innovation, including the responsible use of artificial intelligence, digital assets and emerging financial technologies. He said the NCUA’s strategic planning efforts are focused on ensuring credit unions can innovate while protecting consumers and the Share Insurance Fund from undue risk.
About the NCUSIF
Regarding federal share insurance, Hauptman said the Share Insurance Fund insured approximately $1.86 trillion in member deposits as of Dec. 31, 2025. According to his testimony, the fund protects roughly 90% of all shares held in the credit union system and remains a key component of maintaining confidence in federally insured credit unions.
Questions from Congress
Meanwhile, following the prepared statements, Hauptman fielded several questions from members of the committee, including:
- Rep. Vincente Gonzalez (D-TX) asked if credit unions can continue innovating to reach a wide range of populations. “I think we are a better, more prosperous country because we do have banks that know soybeans and credit unions that know the Broadway industry in New York, for example,” Hauptman replied. “We want to have every nook and cranny of this country covered with a financial institution that meets its needs.”
- Rep. Tim Moore (R-SC) asked what steps NCUA is taking to ensure regulatory tailoring. Hauptman replied that NCUA has done a “true top to bottom” review of outdated and burdensome regulations over the last 18 months, including the agency’s Deregulation Project, and said the agency is working to make sure examiners are aware that “doing new things in a different way is positive as an insurer.”
- Lisa McClain (R-MI) asked Hauptman about efforts under the previous administration in support of regulation by enforcement. “Regulation by enforcement to me is unethical. No one in this room would tolerate it in any other part of their life,” Hauptman replied, adding that NCUA has a specific policy that “no enforcement ever sets policy.”
America’s Credit Unions Issues Statement
“Credit unions and their members thank Chairman Kyle Hauptman for his work to right-size regulations and ensure a unique and diversified credit union industry, where all sizes and types can thrive,” America’s Credit Unions Chief Advocacy Officer Kathleen Coulombe said in a statement. “We agree with the chairman that credit unions are best equipped to serve their local communities in ways that no other financial institution can, because they are truly engrained in those communities. We look forward to continuing to work with the Chairman and NCUA on efforts to tailor and modernize regulations to support this diversification.” –
=================================================
Remember, you're not alone with NCOFCU.org
|
Comments
Post a Comment
Please no profanity or political comments.