NCUA Chairman Todd Harper joined America’s Credit Unions Chief Advocacy Officer Carrie Hunt Monday at the 2024 Governmental Affairs Conference (GAC) for a fireside chat about the credit union system and the agency’s efforts to ensure safety and soundness.
Harper noted the different roles NCUA and America’s Credit Unions have in supporting the strength of the industry – the NCUA as a check-and-balance, and America’s Credit Unions as the industry’s advocate.
While the NCUA is currently monitoring various types of risk – from credit to liquidity and cybersecurity – it’s also concerned about consumer financial protection issues and the agency’s lack of vendor authority. Harper indicated the agency’s focus when it comes to consumer protection is on watching for mistakes, ensuring consistent policies, and defending against bad actors – especially as credit unions continue to grow.
Hunt highlighted that credit unions are the most consumer-friendly financial institutions and stressed the importance of limiting credit unions’ regulatory burdens. Harper said the agency is cognizant of the size, scale, and scope of regulations to look at the burden on credit unions.
To ensure the continued strength and resiliency of the industry, Harper and Hunt discussed the importance of reinstating Central Liquidity Facility (CLF) enhancements to increase credit unions’ use of the facility – especially among smaller credit unions who could better manage liquidity “with limited administrative burdens,” Harper said.
“Credit unions are not just taking advantage of the CLF for emergencies, but also for seasonal, short-term liquidity needs. We’ve instructed examiners to not look at is as a penalty, but as good liquidity management,” he said.
Harper also said the agency shares America’s Credit Unions’ desire to allow all federal credit unions to add underserved areas to their fields of membership (FOMs): “It would be great if all charter types could go into those neighborhoods and meet members where they are.” But counter to America’s Credit Unions’ policy priorities, Harper reiterated his calls for the NCUA to have more authorities to charge premiums for the Share Insurance Fund and to oversee third-party vendors.
Reflecting on the NCUA Board’s composition and priorities, Harper thanked former Board Member Rodney Hood for his focus on fintechs and financial inclusion, and said those will continue. He expects the new board – with Vice Chair Kyle Hauptman and Board Member Tanya Otsuka – will also look at competitive markets, fairness for consumers, and innovation. He said they’ll look to find consensus whenever possible.
Hunt concluded the panel by stressing the need for transparency from the agency, citing the recent call report changes and saying, “Credit unions want to do the right thing.” Harper shared that the agency plans to finalize the FOM rule proposed last year soon and issue an advance notice of proposed rulemaking on record keeping requirements.
Hauptman also spoke to GAC attendees Monday during a breakout session. Hauptman shared his priorities, the importance of telling stories about the impact regulations have on credit union operations and members, and the value of recording NCUA exit exams.
GAC continues through Thursday. Use #GAC2024 on social media to engage with America’s Credit Unions and industry advocates throughout the event.
