ONE-ON-ONE WITH NCUA’S HOOD Board Member Rodney Hood shares his perspective on all things credit unions NAFCU Senior Vice President of Government Affairs Greg Mesack sat down with NCUA Board Member Rodney Hood earlier this summer for a wide-ranging discussion on the state of the credit union industry, Hood’s outlook for the future and some of his notable accomplishments as his term is set to end this fall. Hood served two terms as an NCUA Board member, first nominated by President George W. Bush in 2005 and appointed to serve as vice chairman. Again in 2019, he was nominated by President Donald Trump and was confirmed to serve as chairman. Hood served as chairman until January 2021. During his years on the board, he has prioritized regulatory flexibility to support credit unions’ growth and is particularly interested in fintech, financial equity and inclusion efforts, capital issues and more. Here are some key excerpts from Mesack’s conversation with Hood. The entre conversation can be viewed on NAFCU’s YouTube channel. * Some questions and responses have been condensed and edited for publication and clarity. Mesack: It’s clear that the entire financial services industry is consolidating, and the economy is still recovering from the pandemic—things are still working out, we have inflation and a few other pressing issues. What is your advice to credit unions, big and small, as they navigate these uncertain economic times? Hood: Well, my main advice to credit unions is to do what they do best, and that is continuing to display the people helping people ethos. In spite of all of the pressures that we’re facing today, I’m very proud of the fact that America’s credit union system is positioned and poised for great and ongoing success as evidenced by our most recent Call Report data. Credit unions now serve [more than] 137 million members throughout the United States. Those 4,800 credit unions that we oversee and insure at NCUA now have assets of $2.2 trillion. And while I’m proud of the growth that we’ve seen in number of members and number of assets, I’m even prouder of the fact that credit unions today have over $1.7 trillion in loans outstanding. What does that mean? It means that our credit unions are doing what they do best and that is being there for their members when their members need them. In the midst of today’s inflationary pressures, credit unions are providing loans, as evidenced by high outstanding loan volume. This includes loans that the individuals need to purchase cars to go to and from work; loans for sustainable home ownership; and most importantly, business loans so that we can stimulate the American economy. Yes, there are a lot of what we would call “headwinds” out there, but credit unions have had no diminution in asset quality. Greg, credit unions have had very little charge offs and delinquencies. In fact, they’re historically very low. And one thing that’s historically high is our net worth. Credit unions now have a collective net worth of over 10.7%. That’s almost some 400 basis points beyond the statutory requirement of 7%. So, credit unions have solid capital adequacy, they have great risk management in place, and yes, it may look daunting. And yes, we see a lot of financial services providers out there that are experiencing a lot of hiccups, but I’m very proud that we as the regulator at NCUA have the tools, technology and experienced agency professionals that we need to keep credit unions viable. Mesack: There’s been a lot of focus on fraud in the payment system. One of the NCUA’s supervisory priorities establishes a questionnaire to help credit unions identify fraud red flags. Fraud is such a shifting target. There are always new red flags. What is your perception of credit union performance in identifying and mitigating these evolving fraud risks? Hood: That is an emerging issue … The best line of defense around fraud protection and prevention is having credit unions and their staff members fully engaged. Having them fully trained. 12 THE NAFCU JOURNAL September–October 2023
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