January NCUA Board Meeting

On January 18, 2024, the NCUA Board held an open meeting and discussed and/or approved the following items:

The Short:

  1. Board Briefing, NCUA’s 2024-2026 Diversity, Equity, Inclusion, and Accessibility (DEIA) Strategic Plan. The NCUA Board reviewed its DEIA Strategic Plan for 2024-2026. Staff from the Office of Minority and Women Inclusion presented the agency’s goals for workforce, vendors, and industry in the objectives of diversity, equity, inclusion, and accessibility, and discussed other strategies to informally promote community, such as affinity groups. The ultimate objective is to complete the journey from compliance to optimal agency culture. The DEIA Summit will be held from July 9-11 and the deadline for the credit union diversity self-assessment survey is February 15, 2024.
  2. NCUA’s 2024 Annual Performance Plan. The NCUA Board unanimously approved the 2024 Annual Performance Plan, which provides the agency with direction and guidance toward achieving its mission and the strategic goals and objectives included in the NCUA’s 2022-2026 Strategic Plan. The Strategic Plan includes the following goals: (1) ensure a safe, sound, and viable system of cooperative credit that protects consumers; (2) improve the financial well-being of individuals and communities through access to affordable and equitable financial products and services; and (3) maximize organizational performance to enable mission success.

Today was Board Member Otsuka’s first board meeting. She was warmly welcomed by Chairman Harper and Vice Chairman Hauptman and spoke briefly about the value of public service. Chairman Harper, Vice Chairman Hauptman, and Board Member Otsuka all thanked former Board Member Rodney Hood for his service on the NCUA Board and specifically his work in passing the Second Chance IRPS, championing the ACCESS Initiative, creating the Office of Financial Technology and Access, and developing the agency’s annual DEIA Summit.

America’s Credit Unions looks forward to working with Board Member Otsuka to help credit unions better serve their members. We also thank former Board Member Rodney Hood for his many years of service at the NCUA and his contributions to improving the regulatory environment for credit unions.

The Long:

 Board Briefing, NCUA’s 2024-2026 DEIA Strategic Plan

Staff from the Office of Minority and Women Inclusion presented the NCUA’s 2024-2026 DEIA Strategic Plan. Employees whose experience is consistently aligned are likely to be more engaged and effective. When experiences do not align with established values, morale suffers. The Plan aligns with the government-wide focus on DEIA to attract top talent with a range of skills and experiences. Investing in employees has a real measurable return on investment.

The Plan further detailed the NCUA’s goals for workforce, vendors, and industry for each objective: diversity, equity, inclusion, and accessibility. It noted that it had exceeded the EEO targets regarding employees with disabilities. It planned to use other strategies such as affinity groups as a more informal way to promote community. Its ultimate objective was to complete the journey from basic compliance pre-2011 to an agency culture that creates optimal conditions for all employees, vendors, and customers.

The presentation closed with notes that the 2024 DEIA Summit will be held on July 9-11, 2024. Diversity self-assessment surveys sent to individual credit unions will close on February 15, 2024.

Chairman Harper said the NCUA has a deep commitment to credit unions created to serve marginalized communities. The first credit unions sought to provide financial equity. He noted there is also a persuasive business case for diversity, and companies that have DEIA programs operate more efficiently and effectively. The Plan advances important principles within the agency and across the credit union system, focusing on building secure financial futures. The Plan outlines the NCUA’s efforts to support its strategic objectives over the next four years. It is imperative within the agency and credit union industry to be better positioned for progress. Chairman Harper stated that one way to evaluate is through data and that the deadline for the confidential self-assessment is less than one month away. Staff confirmed that credit union CEOs and board presidents received a custom link sent directly to their email to ensure integrity and security. Reminders were also sent, and recipients should check their spam folders if they are unable to find the link. They can also call the Office of Minority and Women Inclusion at 703-518-1650 or send an email to omwimail@ncua.gov. Chairman Harper noted that one in ten credit unions voluntarily submitted surveys in previous years, and he strongly encouraged credit unions, especially those with more than 100 employees, to complete the survey.

Vice Chairman Hauptman said a diverse workforce makes us better and stronger. He noted that promoting diversity does not include the NCUA telling credit unions who should be on their boards, which should be driven by field of membership. He stated that credit unions were the original answer to financial inclusion and the credit union movement is itself, by definition, diverse, but it becomes less diverse when small credit unions are forced to close under crushing regulations and paperwork. Vice Chairman Hauptman asked about the definition of equity. Staff stated that it was aligned with the President’s 2021 Executive Order as “consistent, systematic, fair, and just treatment of all individuals, including those who are part of underserved communities,” and noted that equality requires that everyone receive the same resources while equity considers the specific needs of a group or person and gives them the same access to opportunities. Equity further means removing barriers to opportunities and upholding cultural fairness. Vice Chairman Hauptman emphasized that resources should not be made available on the basis of race, gender, or anything else. Staff assured him that assistance was not based on protected classes, and programs are available to all employees across protected classes. Vice Chairman Hauptman advocated for a move toward a third-party survey provider/administrator, which has been planned for future surveys, and asked that the disclaimer that no NCUA employee would see the name of the credit union would appear on future surveys.

Board Member Otsuka said it is critical that all employees feel welcome in the workplace and that the Plan is a road map to promote a culture of inclusion and mitigate barriers to accessibility. She added that she appreciates the data-driven approach. Board Member Otsuka asked staff how the Plan defines diversity. Staff replied that it was aligned with the definition in the 2021 Executive Order as the “practice of including the many communities of the American people including underserved communities.” Board Member Otsuka noted that diversity within credit unions is important because they need representation from the communities that credit unions seek to serve. She said there is more work to be done, not just regarding race or gender, but on veteran status, level of ability, and other forms of representation. She asked whether there are barriers members face to serving on credit union boards and noted that some boards reflect the original field of membership and may need to evolve to match current demographics. Credit unions should keep a pulse on demographics and regions to reflect changing markets and find ways to overcome barriers people might be facing if they are interested in serving on a board. Staff confirmed that the Office of Minority and Women Inclusion partners for key messages on webinars and events. It has had early successes in sharing the NCUA’s story across the broader landscape and plans further collaborations across business lines.

NCUA’s 2024 Annual Performance Plan

The NCUA Board unanimously approved the 2024 Annual Performance Plan (APP). The 2024 APP, in combination with the NCUA’s budget, shows how the agency will execute on its 2022-2026 Strategic Plan over the course of the year. The 2024 APP is streamlined, including fewer overall performance indicators than in years past. The indicators are used to assess the agency’s success toward achieving its strategic goals.

Throughout the year, the NCUA Office of the CFO is responsible for measuring and reporting on the agency’s progress toward achieving its goals. Expected to be released in March, the agency also publishes a retrospective annual report that includes a line-by-line update showing the NCUA’s progress in each of the performance measures set for the previous year.

A preliminary review of the 2024 APP shows several positive changes, such as several new performance indicators, including one related to increasing collaboration with the CDFI Fund. The 2024 APP also includes a new performance goal that is focused on providing fair and consistent supervision of all NCUA-insured credit unions.

Chairman Harper reassured stakeholders that while the number of performance indicators is down considerably from previous years, that does not mean that the NCUA will do less to achieve its goals, but rather it will enable a more focused approach. Chairman Harper also noted that, under the 2024 APP, the NCUA will continue to address consumer protection on an equal footing with safety and soundness. In support of this goal, the NCUA will increase the target for fair lending examinations by 10 (from 50 to 60) to ensure credit unions are complying with the laws established to protect consumers against discrimination. He also noted that the agency is working to develop a consumer compliance program for credit unions between $5 billion and $10 billion in assets. Further, Chairman Harper noted that, in light of the CDFI Fund’s updated application, the NCUA is exploring whether it can reinstate a streamlined process to help credit unions complete necessary forms and data analysis.

Vice Chairman Hauptman noted his approval of a new performance indicator in the 2024 APP related to the post examination survey, which has long been a priority of his. The new performance indicator sets a standard of 90 percent or greater for positive responses to the survey related to the collaboration, narrative, and delivery of the examination report. Further, Vice Chairman Hauptman reiterated his call for federal credit unions to record their exit meetings with examiners, which are beneficial for the credit unions and the NCUA.

Board Member Otsuka said that while it is important for credit unions to embrace the use of technology to enhance service to members, it is critical for the NCUA to ensure technology is used in a safe and sound manner and does not harm members or violate consumer protection laws. She appreciates the goals related to financial inclusion, including increased coordination between the NCUA and the CDFI Fund. Regarding the 2024 APP metric on field of membership expansion in underserved areas, Board Member Otsuka noted that such expansion can increase credit unions’ opportunities to serve certain communities, but it is important that they include meaningful access through continuing to offer branches and lower priced financial services. In regard to fair lending exams, she said that this will be an area of focus for her, given that unfortunately we continue to see redlining and lending discrimination. She will support a consumer compliance program and is dedicated to working with fellow board members to strengthen the agency’s consumer protection efforts.

The Board approved the 2024 APP, 3-0.

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