Credit union regulator reprises push for added consumer compliance supervision in speech

Including “consumer financial protection” among his four priorities as a credit union regulator, National Credit Union Administration (NCUA) Board Member Todd Harper on Wednesday reiterated his desire to see the agency strengthen its own focus on consumer financial protection in supervising credit unions.

Harper, speaking before the Governmental Affairs Conference of the Credit Union National Association (CUNA) in Washington, reminded that the agency is responsible for consumer financial protection supervision of credit unions with less than $10 billion in assets. He said 319 credit unions had more than $1 billion in assets as of Sept. 30, and he said the agency needs to refine its approach to consumer financial protection.

Harper tried to get more funding for consumer financial protection supervision in the agency’s 2020-2021 budget, issuing his own proposal in October for comments from credit unions. In December, he voted against the final budget after finding that a negotiated agreement to add two positions to the agency’s consumer compliance section was not reflected in that package.

“The NCUA Board should create a dedicated program for supervising for compliance with consumer financial protection matters,” Harper said Wednesday at the credit union conference. “In doing so, we will better safeguard member interests and ensure that the credit union system lives up to its commitment to serving members.”

He likened the need for consumer compliance exams to the need for regular maintenance on one’s car: “Would you go 10 years without getting a tune-up and checking your oil?  None of us would.  My proposal is about ensuring that a credit union runs smoothly, and if it does not, providing the maintenance needed to optimize credit union performance.”

Harper also touched on specific challenges within the credit union industry in Wednesday’s speech, including rising consumer debt, tightening liquidity, credit unions’ lack of succession planning (which he said was one of two top reasons for credit union mergers), and cyber threats.

He also highlighted the importance of diversity, equity and inclusion to the health of the credit union system. “The agency should support the work of small credit unions, minority depository institutions, and low-income credit unions, who are often the ones reaching the underserved and facing the challenges of increased competition and difficulties achieving economies of scale.”

NCUA Board Member Todd Harper’s remarks before the CUNA Governmental Affairs Conference