NCUA Launches New Digital Tool to Help with the Chartering Process

ALEXANDRIA, Va. (Aug. 8, 2019) – The National Credit Union Administration is encouraging groups seeking to organize credit unions to take advantage of the agency’s new digital tool to help them with the charter application process.

The Chartering Proof of Concept tool is an automated system that will help credit union organizers better understand the process and how to prepare a charter application. It will streamline that process by allowing the NCUA’s Office of Credit Union Resources and Expansion to preview the information to be included in an application.

Organizers will use the tool to evaluate how well they meet the requirements for starting a credit union by reviewing the four critical application elements: purpose and core values, field of membership, capital, and subscribers. They will address questions specific to these critical areas and submit answers to the agency for review.

The Office of Credit Union Resources and Expansion will evaluate and score submissions on how adequately the organizers address each critical element. CURE will invite groups that achieve a minimum score of 80 out of 100 to submit a formal charter application. CURE will advise groups that do not achieve that minimum score to either provide additional information or consider alternatives.

NCUA’s Office of Credit Union Resources and Expansion supports credit unions seeking changes in their charters, bylaws, or fields of membership; minority credit unions; low-income-designated credit unions and credit unions interested in a low-income designation; and groups organizing to start new credit unions.

NCUA Chairman: Credit Unions Can Lead During “a Time of Seismic Change”

Hood Speaks to AACUC on Inclusion, Innovation, and Modern Regulation

CHARLOTTE, NC (Aug. 9, 2019) – America is going through an unprecedented demographic transition, NCUA Board Chairman Rodney E. Hood said today, and credit unions have a chance to show leadership as the financial industry responds to that transition.

“This is a time of seismic change,” Hood said, “and that dynamic creates both challenges and opportunities. I consider financial inclusion to be the civil rights issue of our time. For too long, too many people have been overlooked or locked out of the financial system. Lack of access holds working families back from climbing the financial ladder.

“I believe credit unions are better-positioned than any other player in the financial sector to make a big difference when it comes to diversity and inclusion; because those are a fundamental part of our industry’s history,” he said.

Chairman Hood spoke to the 21st annual conference of the African-American Credit Union Coalition. Today’s speech was the Chairman’s first major address since taking office. The full text of Chairman Hood’s remarks is available online.

AACUC Executive Director Renee Sattiewhite welcomed Chairman Hood and said she and her organization look forward to working with him and NCUA.

“We are so happy to welcome Chairman Hood back to the credit union community, and we are thrilled to welcome him as the first African-American to lead a federal banking regulator,” Sattiewhite said. “There are many important issues ahead, and we are grateful to have him as a partner.”

Chairman Hood described the commitment to service that set the course of his life and career, and he discussed ways the NCUA can both support and protect credit unions and their members.

“When I embarked on my banking career, I always saw our primary mission in simple terms,” Hood said. “It was about people helping people and people serving people.”

Innovation: Changes and Opportunities

Rapid changes in information technology create growing concerns about data breaches, but they also provide credit unions with new tools to improve service and expand access to affordable financial products, Hood said.

“Cybersecurity is a significant concern,” Hood said. “Even the largest and strongest financial institutions have points of vulnerability. It will remain a top priority for NCUA during my chairmanship, and I recently appointed a cybersecurity advisor who reports directly to me.

“On the other side of the ledger, financial technology is creating a different kind of challenge, in the form of new ways of doing business and new customer expectations,” he said. “Mobile banking, digital payments, artificial intelligence, data aggregation, or whatever may come next. These trends are going to change the way you engage members, analyze lending risk and market your products and services.”

Regulatory Reform: Effective, but not Excessive

Chairman Hood made a commitment to regulations “that will encourage innovation, provide flexibility, and fulfill our primary mission of protecting safety and soundness.”

Two examples of this effort, he said, were increasing the threshold for requiring commercial property appraisals from $250,000 to $1 million and a two-year delay in the agency’s risk-based capital rule.

Calling the appraisal rule changes “long overdue,” Hood said they would reduce transaction costs and spur more lending, particularly in hard-press rural areas.

The two-year delay in the risk-based capital rule will ensure it will be properly implemented and will give NCUA an opportunity to take “a holistic approach to the issue of capital in the credit union system,” Hood said.

“The goal is to create a regulatory system that is effective, but not excessive,” Hood said, “so you can go about your vital work of lending and providing your members with the highest level of service and quality, affordable financial products.”

As it moves forward, Hood said, the credit union industry should keep its traditional mission in mind.

“The key to this industry’s future success lies with staying true to the values the credit union system was founded upon,” he said, “the commitment to people helping people by fostering greater financial inclusion, accessibility, and opportunity for all Americans.”

NCUA’s Hood: Federal-State Chartering and Supervision System Working Well

NCUA and NASCUS Chairmen Sign New Document of Cooperation

SAN FRANCISCO (Aug. 14, 2019) – The National Credit Union Administration and state regulators are working well together to modernize the dual chartering and supervision system and reduce regulatory burdens for credit unions, NCUA Chairman Rodney E. Hood said today.

“The system of regulation and supervision where federal and state authorities work cooperatively, always with the common goal of a safe, sounder, more efficient and innovative credit union industry, has clearly demonstrated its merits,” Hood said. “Essential to making that system work is a solid relationship between the NCUA and state regulators, based on mutual respect.”

Speaking to the National Association of State Credit Union Supervisors’ State System Summit meeting, Hood thanked NASCUS President and Chief Executive Officer Lucy Ito for her years of leadership in building the collaborative relationship between NCUA and state regulators. The full text of the Chairman’s remarks is available on NCUA’s website.

Hood and NASCUS Chairman John Kolhoff signed a Document of Cooperation pledging continued coordination between state and federal regulators within the credit union dual chartering system. The document lays out general principles for ensuring credit unions’ safety and soundness, enhancing supervision, and fostering “an environment of innovation, prosperity, and success.” The new document is a significant update to the agreement signed by the agency and NASCUS in 2007.

Hood also reported on the progress of the NCUA-State Supervisor Working Group, created in 2017.

“The group is committed to evaluating the examination program for federally insured, state-chartered credit unions and making recommendations for changes,” he said. “I am excited about the possibilities it represents.”

The Working Group, comprised of NCUA senior staff and representatives from six state credit union regulators, used ideas gathered from focus groups and other credit union stakeholder outreach to create a work plan in three phases, Hood said.

  • Phase I, recently completed, developed a pilot program for a system of alternating examinations. Six states are now participating in that program.
  • Phase II, now under way, will identify improvements in coordination and cooperation between the NCUA and state regulators when conducting joint exams or supervision.
  • Phase III will look for other potential benefits to credit unions from improved collaboration between state and federal regulators.

Hood praised the Working Group for its accomplishments and said the group’s efforts reflected the basic values of the credit union system.

“What we’re doing is really no more than staying faithful to the fundamental credit union principle of people helping people,” he said, “working together to support one another, to share best ideas, to fulfill needs, to find solutions, to create opportunities, to help credit unions and their members grow, thrive, and prosper.”

NCUA Releases Interim Guidance on Serving Hemp Businesses

ALEXANDRIA, Va. (Aug. 19, 2019) – Federally insured credit unions may provide certain financial services to legally operating hemp businesses under new guidance published today by the National Credit Union Administration.

The guidance will be revised and updated once the United States Department of Agriculture finalizes forthcoming regulations and guidelines. Credit unions will be able to provide the customary range of financial services for business accounts, including loans, to hemp businesses within their fields of membership.

“Lawful hemp businesses provide exciting new opportunities for rural communities,” NCUA Chairman Rodney E. Hood said. “I believe today’s interim guidance keeps with the mission of the nation’s cooperative credit system to serve people who have been overlooked and underserved. Many credit unions have a long and successful history of providing services to the agriculture sector. My expectation is that credit unions will thoughtfully consider whether they are able to safely and properly serve lawfully operating hemp-related businesses within their fields of membership.”

NCUA Chairman Hood Statement on the Appeals Court Decision Regarding Field-of-Membership Rule

ALEXANDRIA, Va. (Aug. 20, 2019) – National Credit Union Administration Chairman Rodney E. Hood issued the following statement in response to today’s D.C. Circuit Court of Appeals decision in American Bankers Association v. National Credit Union Administration:

“The NCUA is pleased with today’s Court of Appeals decision. The agency is still reviewing that decision. In the near future, we will provide guidance for affected credit unions.”

NCUA Chairman: Defense Credit Unions “Positioned to Lead the Way” on Financial Inclusion

CHICAGO (Aug. 20, 2019) – Defense credit unions are well-positioned to lead the way on improving access to affordable financial services in underserved communities, National Credit Union Administration Board Chairman Rodney E. Hood said today.

“There are a lot of innovations that defense credit unions have pioneered to better serve members in far-flung postings around the world,” Chairman Hood said. “Those innovations might help us to get a better sense of how to target services to rural communities or other hard-to-reach places. I think the industry as a whole can learn a great deal from defense credit unions that have effectively met the challenges of diverse and highly mobile populations and those that have had limited interaction with traditional financial service providers.”

Chairman Hood spoke before the Defense Credit Union Council’s Annual Meeting in Chicago. During his remarks, he also discussed the importance of financial inclusion calling it the “defining civil rights issue of our time.”

Hood noted there are dividing lines that separate too many Americans from access to safe and affordable financial services, including age, disability, and where a person lives. This is especially true in rural communities, where the withdrawal of financial institutions from rural communities over the last decade poses a serious threat to financial access for the people who still live there.

“When communities lose financial access, it is almost like cutting off the oxygen supply that is needed to fuel the local economy,” Hood said. “We also know that the lack of access to affordable banking and lending services holds working families back from climbing the financial ladder. I’m committed to doing everything we can to recognize and incentivize what’s best in the credit union mission, so that we can remove the obstacles to financial access that all rural and underserved communities are facing.”

NCUA Charters Maine Harvest Federal Credit Union

Credit Union Will Offer Affordable Financial Services to Farm and Food Production Community

ALEXANDRIA, Va. (Aug. 23, 2019) – The state of Maine has a new credit union, Maine Harvest Federal Credit Union, headquartered in Unity.

The National Credit Union Administration on August 14 granted a federal charter and Share Insurance Fund coverage to Maine Harvest, which will serve the employees and approximately 13,000 members of the Maine Organic Farmers and Gardeners Association and the Maine Farmland Trust.

“How appropriate that this credit union is located in a town named Unity,” NCUA Chairman Rodney E. Hood said. “Credit unions are organized through, and operate on, the principle of people working together to support one another. I want to thank the organizers of Maine Harvest for their hard work to bring their dream to reality and congratulate them on their charter.”

Maine Harvest was chartered to make affordable member business loans to small farms, farmers, and other food producers within its field of membership. Loan funds will be available through mission-based deposits. During its first year of operations, Maine Harvest will offer its membership:

  • Agricultural real estate loans
  • Agricultural-related equipment loans
  • Regular shares
  • Share certificates
  • Home and mobile banking
  • Wire transfers
  • Cashier checks
  • Shared branching
  • Debit ATM cards
  • E-statements and online applications

Maine Harvest Federal Credit Union expects to begin operations this fall.

NCUA Urges Credit Unions to Prepare for Tropical Storm Dorian

ALEXANDRIA, Va. (Aug. 27, 2019) – The National Credit Union Administration is advising credit unions in the path of Tropical Storm Dorian to take precautions as the storm enters the eastern Caribbean.

“Credit unions in Dorian’s path should to take measures to protect their staff and secure their operations,” NCUA Board Chairman Rodney E. Hood said. “The NCUA will be closely monitoring the storm’s progress, and we will be ready to assist credit unions with maintaining or restoring operations, if necessary. Credit unions and members can find information on staying safe from several online resources, and we encourage everyone to be alert for official announcements and media reports as the storm draws near.”

Dorian’s current projected path could take it across Puerto Rico by Wednesday, and the storm could reach Florida by this coming weekend.

The NCUA maintains a hurricane and disaster information page on its website as well as on the consumer information page. The National Hurricane Center has regular updates on the storm as it approaches landfall, and the Department of Homeland Security has an information page on being prepared for hurricanes.

Credit union members with questions may contact the NCUA’s Consumer Assistance Center at 800.755.1030 Monday through Friday between 8 a.m. and 5 p.m. Eastern. The NCUA’s Office of Credit Union Resources and Expansion can provide urgent needs grants of up to $7,500 to low-income credit unions that experience sudden costs to restore operations interrupted by the storm.

FFIEC Encourages Standardized Approach to Assessing Cybersecurity Preparedness

The Federal Financial Institutions Examination Council (FFIEC) members today emphasized the benefits of using a standardized approach to assess and improve cybersecurity preparedness. 

The members note that firms adopting a standardized approach are better able to track their progress over time, and share information and best practices with other financial institutions and with regulators.   

Institutions may choose from a variety of standardized tools aligned with industry standards and best practices to assess their cybersecurity preparedness.  These tools include the FFIEC Cybersecurity Assessment Tool, the National Institute of Standards and Technology Cybersecurity Framework, the Financial Services Sector Coordinating Council Cybersecurity Profile, and the Center for Internet Security Critical Security Controls. 

FFIEC members welcome collaborative approaches to advance and support cyber preparedness and enhance the efficiency and effectiveness of the supervisory process.  While the FFIEC does not endorse any particular tool, these standardized tools support institutions in their self-assessment activities.  The tools are not examination programs and the FFIEC members take a risk-focused approach to examinations.  As cyber risk evolves, examiners may address areas not covered by all tools.

Williams Chosen as Confidential Assistant to NCUA Chairman Hood

ALEXANDRIA, Va. (Aug. 28, 2019) – The National Credit Union Administration today announced the selection of Hallie Williams as confidential assistant to NCUA Chairman Rodney E. Hood.

Williams began her duties August 26.

“I’m pleased to welcome Hallie to NCUA, and I look forward to the contributions she will make to the management team,” Hood said.

Prior to joining NCUA, Williams worked in several capacities, including executive assistant and scheduler, to Sen. Bob Corker (R-TN) in his Washington, D.C., office.  While working for Senator Corker, Hallie was on the Senator’s leadership team.

Williams holds a bachelor’s degree in business administration from the University of Tennessee.