2 NCUA Board members talk innovation before credit union audience

Fintech and cryptocurrency were among the key topics Tuesday of addresses by two members of the National Credit Union Administration (NCUA) Board before a Washington, D.C., audience of credit union leaders and staff.

Speaking before a conference of the Credit Union National Association (CUNA), NCUA Board Member Rodney Hood, in remarks prepared for Tuesday’s session, told the group that he wants the agency to host tech sprints that serve as “a forum for focusing on problems and solutions and how credit unions and fintechs can work together.” Hood said he hoped to work with his board colleagues to “bring this to fruition” later this year.

Hood said more technology will mean new challenges, including in the area of cybersecurity. However, he called fintech “a promising avenue that I encourage credit unions to explore as a strategic imperative.”

“This is not about chasing after the latest fads or fashions; I want to see credit unions approach fintech with a sense of purpose and clarity,” he said. “Let’s be open to innovation and experimentation, but always with the primary commitments being of service to your members, ensuring the performance of your institutions, and protecting the safety and soundness of the broader system of cooperative credit.”

NCUA Vice Chairman Kyle Hauptman on Tuesday again pressed his view that credit unions should be able to engage in the cryptocurrency space. Noting the guidance the agency released in December on partnering with crypto exchanges. (In that letter, the agency noted that as insurer, it does not prohibit federally insured credit unions from establishing such relationships and describes the conditions under which they may do so.)

Hauptman described such partnerships as a “new source of non-interest income” for credit unions and said the cooperatives, in his view, need not “worry about the technical side of this.”

“Vendors are going to offer you services that should be better, cheaper, faster, more secure. Most of us don’t have to know all the details,” he said.

Hauptman said there are two reasons he cares so much about this issue. “First, I’m a fiduciary of the $20 billion National Credit Union Share Insurance Fund, and that’s your money, not NCUA’s, so I wouldn’t be doing my job if I didn’t help you guys do what you need to do to compete,” he said. “The second reason is that we need to publicize that credit unions are a market for potential vendors, Silicon Valley, and venture capital investors to think about. One hundred and thirty million Americans, $20 trillion in assets, that’s a good market to partner with and make products for.”

NCUA Board Member Rodney E. Hood Remarks at the 2022 CUNA Governmental Affairs Conference Washington D.C.

NCUA Vice Chairman Kyle S. Hauptman Remarks at the 2022 CUNA Governmental Affairs Conference