WASHINGTON—NCUA is preparing to refund more than $60 million to certain credit unions, while others will be sending more money to the agency, Board Member Rodney Hood announced during CUNA’s Governmental Affairs Conference.
Hood said the agency will be making refunds in the amount of $281.6 million that will go to about 2,900 CUs whose insured shares declined between June 30, 2022 and Dec. 31 of the same year.
The agency will be invoicing $219.5 million from the almost 1,900 credit unions whose insured shares increased during the same period, resulting in a net refund of $62.1 million.
The notices and invoices will be sent out by mid-March. Refunds are expected to be distributed by the second week in April, Hood said. Hood pointed out that declines in total insured shares are uncommon, with 2013 the last time that happened.
‘Progress’ Cited
Turning to “progress” the agency has made in recent years, Hood said the agency has advanced a number of vital regulatory reforms to provide CUs with greater flexibility, while ensuring the safety and soundness of the credit union system.
“Just think about the work we’ve done on CUSOs, loan participation rules, support for minority depository institutions, providing guidance for hemp industry businesses, the list goes on,” Hood told attendees.
When Hood was chairman—prior to current Chairman Todd Harper—NCUA began to lay the groundwork for its new Office of Technology and Access, Hood pointed out.
New ACCESS Initiative
“We also established the ACCESS initiative to bring greater focus and clarity to our financial inclusion efforts. In 2020, we hosted the first Diversity, Equity, and Inclusion Summit, which is now an annual event in its fourth year,” Hood told GAC. “We’ve streamlined the chartering process, to encourage new credit union charters, bringing several new institutions into the system over the last couple of years. That’s another area where my board colleagues have shown tremendous leadership, and it’s been a pleasure to work with them to get that done.
“But my point here is not to provide a laundry list or to run a victory lap,” continued Hood. “I highlight these things for a simple reason: almost all of those measures benefited from the informed advice and input we received from credit union leaders, like we have here today. Those achievements, and so many others, are a testament to the power of industry advocacy and feedback, and they wouldn’t have been possible without the people in this room.”
Elephant in the Room
Hood then addressed what he termed the “elephant in the room.”
“The troubling economic outlook, which is made all the more uncertain by the mixed signals we’re getting,” said Hood. “We’re seeing strong numbers in the monthly jobs reports, and the economy expanded at a solid 2.7% annual rate in the last quarter – slowing somewhat, but still showing gains. But against those promising numbers we still have high inflation that’s punishing your members and higher interest rates that are affecting your risk profile, and there’s still a substantial risk of recession this year.”
Hood urged credit unions not to be alarmed, but to be alert and prepared, and shared optimism for the movement and its current strength, citing several success stories. That includes a new charter last year for the People Trust Credit Union, a minority-led institution in North Little Rock, Ark., whose founder is a man who started his career as a barber, and later went on to establish a barber college to serve his community.
More Examples Cited
Meanwhile, Hood noted that in Iowa, GreenState Credit Union has launched an initiative called “10 Over 10” to boost homeownership opportunities among minority populations.
“GreenState had, at the time they announced the initiative, about $10 billion in assets, and so they made a pledge that they’d direct 10% of their total assets, $1 billion, to home loans for people of color over the next 10 years. So far, I understand, they’ve committed about $300 million toward that goal, so they’re almost a third of the way there,” Hood explained.
Hood pointed to other examples, such as in Lame Deer, Mont., where newly chartered Morning Star FCU will serve under-served Native American populations. In Maine, the state league raised $1 million to combat hunger. In San Antonio, River City FCU opened a micro-branch at a popular community center, staffed with just two employees, to provide financial literacy counseling.
Making the Case
“I love these kinds of stories, and I could list them off all day, just from what I’ve witnessed working at the NCUA and traveling around the country visiting with industry leaders,” Hood said. “But just those handful of examples illustrate the case—the credit union industry remains a vibrant, innovative part of the financial services ecosystem, and the ethos of ‘people helping people’ remains as compelling today as it was a century ago when the cooperative finance movement really started picking up momentum. Your mission is to keep that momentum going, and to carry the values of the credit union movement forward, for future generations.”
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