ALEXANDRIA, Va.–Why don’t more credit unions fill out NCUA’s Diversity Self-Assessment? It comes down to trust issues and even “fear,” according to the agency, which is now taking a big step to address those.
Since its introduction all members of the NCUA board have repeatedly asked credit unions to fill out the Diversity Self-Assessment, which the agency says it uses to learn about credit unions’ diversity policies, activities and challenges, and to allow it to share best practices and provide technical assistance and resources to enhance diversity initiatives.
And while the number of CUs participating in 2023 set a new high, it’s a relative number, as it still represents a small number of credit unions overall.
Why? Even though the Self-Assessment has in the past purported to be anonymous, it hasn’t totally been, and many CUs still have some big concerns, according to Miguel Polanco, director of NCUA’s Office of Minority and Women Inclusion (OMWI).
What CUs are Saying
During the NCUA board meeting, Vice Chairman Kyle Hauptman asked Polanco, “It’s hard to read people’s minds, but what is your best guess as to why some people are reticent to fill out the rather simple form and send it to their regulator?”
“What we have heard is that some are concerned about the fact we are the regulator, and sometimes there's a little bit of a trust issue,” responded Polanco. “It’s also voluntary. Another (reason) is people really don't have a lot of time. We have a ton of credit unions that are small and that operate with volunteers, so it's very difficult for them to actually dedicate some additional time to responding to our survey.
“Another thing that we have learned as well is that when they submit the information they don't know what exactly we're going to do with it. Is it going to at some point become something that are detrimental to them?” Polanco explained.
Moving to a Third Party
To that end, Polanco said NCUA is moving to a third-party survey provider to administer the Self-Assessment in 2024.
“That way we can keep the agency at arm’s length from the information,” Polanco said. “We only will be asking for aggregated reports, so the information is completely kept outside of NCUA and we only receive the type of information we need for our reports.”
Hauptman noted that until this point, the reports, even though not seen by everyone at the agency, were still seen by some who knew the names of the responding credit unions.
‘I Wouldn’t Trust That’
But saying the agency quarantines the reports and that only some employees in one department see it doesn’t work, according to Hauptman.
“I wouldn't trust that,” he said. “Employees can move to other departments. And the FDIC, for example, has an anonymous survey they put out and I know banks that do not do it because they're terrified that you can see which IP address it was submitted from. And there may be only one bank in the area from which the report came. If you understand that level of fear, which I think is 100% justified, then i think we're on right track.”
Moving forward, Hauptman asked the Self-Assessments prominently display words to the effect of “No NCUA employee will ever see the name or identify of the credit union.”
Additional information on the assessments is available here.