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Hood Asks Congress to Allow CUs to Serve Underserved Areas; Offers Congress Update on CUs, NCUA

NCUA Chairman Rodney Hood

 

New NCUA Chairman Rodney Hood on Wednesday asked Congress to amend federal laws governing fields of membership to allow credit unions to more easily provide financial services to underserved areas.

“Allowing federal credit unions with a community or single common-bond charter the opportunity to add underserved areas would open up access for many more unbanked and underbanked households to credit union membership,” Hood said in testimony prepared for a Senate Banking Committee hearing that featured financial institution regulators. The full statement can be found HERE.

Hood also asked Congress to amend federal laws governing fields of membership to allow credit unions to more easily provide financial services to underserved areas.

Hood said that he has asked agency staff to modernize the credit union chartering process to make it easier for a new credit union to be chartered and called on Congress to make several other changes to the field of membership requirements.

During his prepared remarks, Hood discussed the efforts and initiatives the NCUA has undertaken to meet the goals the agency set out in its 2018–2022 Strategic Plan, including (1) ensuring a safe and sound credit union system; (2) providing a regulatory framework that is transparent, efficient, and improves consumer access; and (3) maximizing organizational performance to enable mission success.

In terms of the health of CUs, at year-end 2018 Hood updated Congress by noting there were 116-million CU members representing $1.45 trillion in total assets, with a system aggregate net worth ratio of 11.3%.

Hood pointed to the 2018 and 2019 distributions from the NCUSIF and its 1.39% equity ratio as further indicators of strength. 

The new chairman also pointed out that the NCUA is not permitted under law to enforce any corrective action at third-party vendors. Those vendors may or may not grant the agency the right for a voluntary review.

“In recent years, nearly all of the core technology service providers that exclusively serve credit unions declined a voluntary review by the NCUA,” he added.

Hood said that he is extremely worried about the cybersecurity risks that credit unions face.

“Cybersecurity keeps me up at night,” he told the committee.

Hood also asked Congress to give the NCUA the discretion to set alternate maturity limits and to provide more flexibility under the member business loan cap.

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