Regulators Report to Congress

I have read the prepared testimonies of the FDIC Chair Jelena McWilliams and NCUA Chair Rodney Hood presented to the Senate Banking Committee.

The FDIC’s response to the coronavirus pandemic was clear. McWilliams’ summary:

“As it became clear that the public health emergency caused by COVID-19 would lead to a significant economic disruption, the FDIC took swift, decisive actions to (1) encourage banks to work with affected customers and communities, (2) increase flexibility for banks to meet the needs of their customers, (3) foster small business lending, (4) protect consumers and increase financial options, and (5) actively monitor the financial system.”

A Missed Opportunity

Chairman Hoods’ remarks listed every action and program that NCUA has undertaken during his tenure. These included not just responses to the supervisory and legislative COVID-19 changes, but also cybersecurity programs, diversity initiatives, the sale of taxi medallion loans and legislative changes the Agency would like to see. Not included in this legislative wish list was a request for NCUA vendor oversight, perhaps a positive indication of regulatory self-restraint.

While the focus on NCUA’s numerous rule making and emergency supervisory accommodations is understandable, I was also looking for a shout out for what credit unions were doing for members. Stories that would illustrate the cooperative difference. Numbers that would demonstrate how credit unions use their tax free capital accumulation to help members. There were only brief mentions of two credit unions’ loan volumes under the PPP program which is on point, but not unique to credit unions.

Crises are a time of heightened attention for financial services because of the vital role credit plays for members, small businesses and communities. Credit is credit unions reason for being. Retelling that story when people are listening, asking for updates, is a special moment to once again explain why cooperatives exist.

The three regulatory functions under the NCUA board are means to enhance safety and soundness. The goal of these tools is to enable each credit union to make a difference in members’ lives. The industry is doing that daily. But it didn’t get reported.

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