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NCUA Board Chairman Hood Talks about Financial Literacy, Community Service at Destinations Credit Union Event

PARKVILLE, Md. (July 18, 2019) – Destinations Credit Union, a federally insured, state-chartered credit union headquartered in Baltimore, has been designated a low-income credit union by the National Credit Union Administration and the Maryland Commissioner of Financial Regulation.

“This means Destinations will have access to more tools to serve its members and its community,” NCUA Board Chairman Rodney E. Hood said. “Effective regulation entails looking at what an industry is doing right, and what we’re seeing here today is a sterling example of people who are getting it right.

“It’s a story about expanding opportunity and shared prosperity,” Hood said. “It’s a story about people investing in their own communities. Most of all, it’s a story about people helping people to achieve something greater by working together in partnership.”

Chairman Hood spoke at an event today hosted by Destinations to announce a partnership with Operation HOPE to open a financial literacy office in a Destinations branch in Parkville, Maryland.

Destinations will now have a financial well-being coach on staff to lead workshops and provide individual members with counselling, including advice on building savings, improving credit scores, and managing debt. Destinations is the first credit union in the country to offer the “HOPE Inside” program.

“The NCUA regards promoting financial literacy as fundamental to the credit union mission,” Hood said. “An educated credit union member is better-equipped to make the choices that lead to greater financial security. So I fully support efforts like the one Destinations and Operation HOPE are launching.”

Destinations Credit Union joins more than 2,500 federally insured credit unions across the country that have the low-income credit union designation. The designation is available to credit unions that serve communities with majority low-income populations and it provides them with an exception to the statutory business lending cap and access to Community Development Revolving Loan Fund grants and loans, secondary capital, and non-member deposits.

WASHINGTON – As a result of a working group established by the U.S. Department of the Treasury’s Office of Terrorism and Financial Intelligence, the federal bank regulatory agencies and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) today issued a joint statement as part of continuing efforts to improve transparency into their risk-focused approach to Bank Secrecy Act (BSA)/anti-money laundering (AML) supervision. The risk-focused approach enables federal agencies to better tailor examination plans and procedures based on the unique risk profile of each bank.

The statement outlines common practices for assessing a bank’s money laundering/terrorist financing risk profile, assisting examiners in scoping and planning the examination and initially evaluating the adequacy of the BSA/AML compliance program. Using this approach, the agencies generally are able to allocate more resources to higher-risk areas and fewer resources to lower-risk areas when conducting BSA/AML examinations. The statement does not establish new requirements, and also notes that having a risk-based compliance program enables a bank to allocate compliance resources commensurate with its risk.

This statement was developed by a working group aimed at improving the effectiveness and efficiency of the BSA/AML regime. Members include the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and FinCEN.

Today’s joint statement is the third statement resulting from the working group.

Attachment: Joint Statement on Bank Secrecy Act/Anti-Money Laundering Supervision (opens new window)

Agency	Contact	Phone
Federal Reserve	Darren Gersh	202.452.2955
FDIC	David Barr	202.898.6992
FinCEN	Steve Hudak	703.905.3770
NCUA	Ben Hardaway	703.518.6330
OCC	William Grassano	202.649.6870

ALEXANDRIA, Va. (July 30, 2019) – Credit unions can get valuable information about how the National Credit Union Administration examines for liquidity and interest-rate risks on an Aug. 14 webinar hosted by the agency.

Registration for the webinar, “Liquidity and Interest-Rate Risk Management,” is now open (opens new window). The webinar is scheduled to begin at 2 p.m. Eastern and run approximately one hour. Participants will be able to log into the webinar and view it on their computers or mobile devices using the registration link. They should allow pop-ups from this website.

Liquidity and interest-rate risks are supervisory priorities for the NCUA in 2019.

John Nilles and Robert Bruneau, senior capital market specialists with NCUA’s Office of Examination and Insurance Capital Markets Division, will be joined on the webinar by Charles Valenti, chief executive officer of Del Norte Credit Union of Santa Fe, New Mexico; and Jeremy Ebert, vice president and treasurer of Wings Financial Credit Union of Apple Valley, Minnesota. Topics will include:

• Interest-rate risk supervision;
• Management’s ability to meet current and prospective liquidity needs;
• Regulatory requirements for liquidity and contingency funding plans; and
• How different credit union business models require customized approaches towards achieving financial objectives while effectively managing risk.

The NCUA will provide live Twitter updates on @TheNCUA. Participants can submit questions over Twitter anytime during the presentation and in advance by emailing [email protected]. The email’s subject line should read, “Liquidity and Interest Rate Risk Management.” Please email technical questions about accessing the webinar to [email protected]. This webinar will be closed captioned and archived online approximately three weeks following the live event.

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

ALEXANDRIA, Va. (July 31, 2019) – The National Credit Union Administration is offering grants of up to $25,000 for a new pilot mentoring program for small low-income credit unions that are also designated as minority depository institutions.

The new program (opens new window) will make three to five targeted technical assistance grants to help these small institutions establish mentoring programs with larger low-income, MDI credit unions that can provide expertise and guidance in serving low-income and underserved populations.

“Minority depository institutions play a crucial role in delivering financial services to people and communities who have been overlooked,” NCUA Board Chairman Rodney E. Hood said. “This pilot project is an extension of the efforts the NCUA makes through its Minority Depository Institution Preservation Program to provide technical assistance, training, and mentoring opportunities to help these credit unions help their members. I encourage eligible credit unions to consider applying for this new program.”

The NCUA will accept grant applications from Aug. 18 through Sept. 28. Interested credit unions can find applications through the agency’s CyberGrants portal (opens new window). Staff from the NCUA’s Office of Credit Union Resources and Expansion will be available to answer questions about the pilot program through Sept. 25. Credit unions should submit questions to staff by email to [email protected].

The NCUA’s annual Community Development Revolving Loan Fund allocation is providing funding for the pilot program.

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.

ALEXANDRIA, Va. (July 31, 2019) – The National Credit Union Administration issued two prohibition orders and five prohibition notices in July. These individuals are prohibited from participating in the affairs of any federally insured financial institution.

• Joey E. Camp, a former employee of Peoria Fire Fighters Credit Union in Peoria, Illinois, was sentenced on one count of theft.
• Amy Denise Fincher, a former employee of Rheem Arkansas Federal Credit Union in Fort Smith, Arkansas, pleaded guilty to the charge of theft.
• Christopher Dillon Hughes, a former institution-affiliated party of Dixies Federal Credit Union in Darlington, South Carolina, agreed and consented to the issuance of a prohibition order and agreed to comply with all of its terms to settle and resolve the NCUA Board’s claims against him.
• Jennifer L. Mix, a former institution-affiliated party of Hornell Erie Credit Union in Hornell, New York, agreed and consented to the issuance of a prohibition order and agreed to comply with all of its terms to settle and resolve the NCUA Board’s claims against her.
• Ignacio Morales, a former employee of Borinquen Federal Credit Union in Philadelphia, Pennsylvania, pleaded guilty to the charges of conspiracy to defraud the government, embezzlement, false reports, and money laundering.
• Benjamin Tyler Severson, a former employee of Marine Credit Union in La Crosse, Wisconsin, pleaded no contest to one charge of identity theft.
• Shannon N. Smith, a former employee of Appalachian Community Federal Credit Union in Gray, Tennessee, was sentenced on the charge of theft of property.

Prohibition and administrative orders are searchable by name, institution, city, state, and year at the NCUA’s Administrative Orders webpage. The webpage also provides links to the enforcement actions of federal banking agencies against other institutions or their affiliated parties.

You may view NCUA enforcement orders online or inspect them at the NCUA’s Office of General Counsel between 9 a.m. and 4 p.m. Eastern, Monday through Friday. You also may order copies by mail from the NCUA at 1775 Duke St., Alexandria, VA 22314-3428.

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.

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 21^st 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 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 (opens new window) 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.”

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.”

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.”