NCUA’s Hood outlines top priorities: effective regulation, forward approach to innovation, financial inclusion

Financial inclusion the 'civil rights issue of our time'

Effective regulation, a forward-looking approach to innovation, and financial inclusion to better serve a changing population and economy are the top priorities of the federal credit union regulator, the agency’s board chairman said Friday.

National Credit Union Administration (NCUA) Board Chairman Rodney Hood said the three priorities are designed to “keep that success going” of credit union expansion in members and assets, noting that credit unions now count 117 million members and hold assets of more than $1.5 trillion. He made the remarks at the annual meeting of the African-American Credit Union Coalition (AACUC), in Charlotte, N.C.

For regulation, Hood said he desires a system that is “effective, but not excessive.” He said the agency is working to modernize its regulatory system, including by modifying or eliminating regulations “that no longer fit a changing financial system.”

He pointed to the proposed two-year delay in the effective date (to 2022) of the agency’s risk-based capital rule as evidence of the action the agency is taking. He said the delay allows the agency to “be sure the rule will be implemented properly and that we take a holistic approach to the issue of capital in credit union system.”

He also told the group he has made it a priority to encourage expanded employment opportunities for people who were convicted of minor crimes in their past, but have now paid their debt to society. “This effort builds upon the First Step Act, which was signed into law last year by President Trump after being passed by Congress with strong bipartisan support,” he said.

In other remarks, Hood said cybersecurity “is a significant concern,” noting the recent news of a breach at banking giant Capital One. “Yes, the threat of a data breach is a real and scary thing,” Hood said. “But it’s also an opportunity to focus on improving security practices and providing the highest level of protection to your members’ assets and data.”

Likewise, he told the group, the rise of financial technology (fintech) firms is also daunting. “But, it also creates an outstanding opportunity to improve customer service, to expand access to affordable financial services, to offer new types of financial products, and to support your community in new ways,” he said.

On diversity and inclusion, Hood said he considers financial inclusion to be the “civil rights issue of our time.”

“For too long, too many people have been overlooked or locked out of the financial system — and we know that the lack of access to affordable banking and lending services holds working families back from climbing the financial ladder. We need to remove the obstacles these Americans face,” he said. “That’s a goal I look forward to achieving with you.”

NCUA Chairman Rodney E. Hood Remarks – African-American Credit Union Coalition 21st Annual Conference