NCUA Vice Chairman Kyle Hauptman thanked credit unions for their performance over the last two years to get through a situation “definitely not in the manual” at the 2022 CUNA Governmental Affairs Conference (GAC) Tuesday.
“Credit unions have innovated for years to meet their members’ ever-evolving financial needs,” he says. “You all know that the only constant is change, and that standing still can be riskier than experimenting with new ways of doing things.”
Hauptman aims to have NCUA also evolve with the times to provide quality service, despite being saddled with a problem that affects many government agencies.
“We’re basically a monopoly provider of our services, and monopolies often wind up producing mediocre products at high prices,” he says. “By implementing normal, modern customer feedback and transparency, the agency you pay for ought to be an improved regulatory experience. So, we know that NCUA has to modernize as well.”
Hauptman also said the development of cryptocurrencies could have as much as a “profound, disruptive” impact on financial institutions as the internet, and NCUA will work on ways credit unions can get into the space.
“Let me share the true north that guides me: I don’t want to see credit unions slowly go the way of Blockbuster Video because their regulator wouldn’t let them compete,” he says.
Board member Rodney Hood said he’s seeing reassuring trends in credit unions, even through the pandemic.
“Since the start of the pandemic, we’ve seen that credit unions have added more than 7 million members, and loan growth has been strong while delinquency rates remain manageable,” he says. “Particularly in light of the severe headwinds we’ve faced these last 24 months, those results are a testament to the fact that the credit union model continues to be a strong option for consumers seeking quality financial services and affordable, reliable credit.”
He also says he was encouraged by new charter applications. After only one in 2020, there were four in 2021, and several are in progress this year.
But Hood urges credit unions to keep seeking new ways to deliver services.
“This industry cannot rest on its laurels. And the reality is that there are some serious competitive challenges that credit unions will need to address related to fintech. Right before our eyes, we are seeing the financial services model move from a retail delivery model to a digital delivery platform,” he says. “To meet those challenges will require focusing on opportunities to reach new demographics and, especially, younger generations of banking customers.”
He says he hopes NCUA will look to provide further opportunities for innovation and urged credit unions to explore those as well.
“I want to see credit unions approach fintech with a sense of purpose and clarity," Hood says. "Let’s be open to innovation and experimentation, but always with the primary commitments being of service to your members, ensuring the performance of your institutions, and protecting the safety and soundness of the broader system of cooperative credit.”
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