COLORADO SPRINGS, Colo.–NCUA Board Member Rodney Hood, whose term has officially expired, shared with a credit union audience here some of the lessons he has learned during his tenure while also saying the future of credit unions is going to depend on learning and depending on each other.
Hood told the Defense Credit Union Council he was hoping to “provide some perspective.”
Among those lessons:
Financial Inclusion
“Four years ago this month, in August 2019, I came before the DCUC in one of my earliest public appearances as NCUA chairman…My primary focus on was financial inclusion,” Hood said. “At the time, I’m not sure I realized how central that theme would be to the next four years of my life. I noted then that I saw financial inclusion as the defining civil rights issue of our time. In fact, that may have been one of the first times I used that line – and those of you who have listened to me speak over the last few years have probably heard me say it so many times that you’re exhausted of hearing it.”
Hood said much has been accomplished in financial inclusion, including the NCUA DEI Summit, and the ACCESS initiative for financial inclusion.
‘Change is Vital’
Hood quoted Warren Bennis’ observation that, “In life, change is inevitable – but in business, change is vital.”
“…Credit unions must be prepared to recognize and respond to the realities of a changing society,” said Hood. “We’re experiencing a dramatic evolution in our nation’s demographics, and that’s going to present continued challenges to all of us in leadership positions, whether in the public or private sector, and will demand new ways of thinking and doing business. Now, I know what you’re thinking: Rodney, everybody already knows that. And yes, I know it’s a cliché that institutions of all kinds need to be prepared to confront these dramatic changes.
An ‘Acute’ Challenge
“However, I do think that the challenge is particularly acute for smaller institutions in our society, credit unions among them,” Hood continued. “These changes can be more difficult to navigate for smaller financial institutions, for instance, which simply don’t have the resources or commanding market share that a lot of larger players bring to the game. I know from my own frank discussions with credit unions industry leaders that there’s concern about attracting younger members, as well as recruiting younger workers to your institutions.”
Addressing that challenge, Hood told the DCUC meeting, is going to require creativity and a sense of experimentation and innovation.
“Certainly, a strong commitment to diversity, equity, and inclusion must be part of that process, and throughout my service on the NCUA board, you all well know that I’ve been beating the drum to urge credit unions to make DEI a central part of your business models and practices,” he said.
Going beyond DEI, Hood also urged credit unions to focus on financial technology applications, as well as generative AI, digital currencies, machine learning and more.
Not Going Away
“They’re not going away, so the sooner credit unions learn how to integrate them into your business plans, the stronger position you’ll be in for the future,” Hood said. “And again, I emphasize that this is particularly true for smaller institutions, for whom fintech can truly serve as a force multiplier allowing you to reach new members.”
Learn From Each Other
Hood further urged credit unions to “learn from each other and support each other.”
“One of the key ways in which credit unions and other cooperative finance entities differ from many traditional financial services institutions is that they’re not necessarily in direct competition with one another,” Hood continued. “That means your institutions can afford to be more supportive of one another and more collaborative. I know that events like this create an excellent opportunity to people to develop working relationships and share ideas, and I encourage you to continue doing so.”
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