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NCUA Board Member Discusses Risk, Innovation, Inclusion, and Consumer Financial Protection

WASHINGTON, D.C. (Sept. 10, 2019) – Learning from the past but focusing on the future is essential to meeting a period of significant change with warning signs dotting the landscape, National Credit Union Administration Board Member Todd M. Harper said today.

Speaking to a Women in Housing and Finance Policy event today, Harper said America’s credit unions, the NCUA, and the financial system at large face a variety of risks as the financial and social environment undergoes rapid change. The text of his remarks is available online here.

“We need to be fair and forward-looking; innovative, inclusive, and independent; risk-focused and ready to act; and appropriately engaged with all stakeholders,” Harper said. “We need to have foresight for the year 2020, not just 20/20 hindsight. While it’s important to develop new rules and revise old ones based on lessons learned in the last crisis, it’s equally important to look ahead at risks coming over the horizon.”

Harper detailed his regulatory approach and areas of concern he sees ahead.

Safety, Soundness, Consumer Protection

“One of my priorities is to safeguard the safety and soundness of federally insured credit unions,” Harper said. “I am keenly focused on issues of capital and liquidity and on cybersecurity.

“The NCUA also has consumer financial protection responsibilities for credit unions with assets of less than $10 billion,” he said. “The credit union system has a mission to promote thrift and serve people of modest means. Consistent with the law, we need to work to increase uniformity in our consumer financial protection supervision.”

Emerging Risks

Harper listed several areas where change will be accompanied by risk, and he discussed his recommendations for meeting those changes and risks.

• Liquidity—Liquidity is essential to surviving times of economic stress, and the NCUA requires credit unions have appropriate risk-management and access to liquidity in place.
• Rising consumer debt—Consumer debt has reached a record $4 trillion, and credit unions need to carefully evaluate risks when making new loans and hedge risks appropriately.
• Deficits and national debt—A large and growing national debt creates significant uncertainty.

Working together

The NCUA and all credit union system stakeholders have roles to play and responsibilities to protecting credit union members and the system overall, Harper said.

“By getting ahead of emerging risks and better protecting consumers, the NCUA will have 2020 foresight and not 20/20 hindsight,” he said. “I invite anyone interested in consumer financial protection to reach out to me and share their concerns and solutions. In doing so, we can build a stronger credit union system to better serve everyone in the future.”