NCUA’s Hood: Juneteenth Compels Us to Advance the Goal of Financial Inclusion

NCUA Issues Annual Report on Efforts to Preserve Minority Credit Unions

ALEXANDRIA, Va. (June 19, 2020) – The celebration of Juneteenth compels all of us to do our part to advance the goal of greater financial inclusion for more Americans, National Credit Union Administration Chairman Rodney E. Hood said today. 

“As the nation celebrates this year’s Juneteenth, we must recommit ourselves to the principles of diversity, equity, and inclusion, which are necessary to foster and promote greater opportunity for all Americans,” NCUA Chairman Hood said. “As we reflect on the enormous significance of this day and what it represents, it should also remind us how much further we must go.

“The recent protests across America and the COVID-19 pandemic, which has disproportionately affected minority communities, have illustrated the economic and financial challenges of minority, rural, and underserved communities. These events underscore the importance of MDI credit unions to their communities, and the NCUA has and will continue to find more avenues of support for these institutions.”

First celebrated 155 years ago today, Juneteenth remains the most widely recognized observance of the end of slavery in the United States. It commemorates June 19, 1865, when Union forces in Galveston, Texas, read federal orders stating that all previously enslaved people in Texas were now free. Although the Emancipation Proclamation was signed more than two years prior, the minimum level of federal troops in Texas during the Civil War prevented the Proclamation from being enforced. 

Forty-seven states and the District of Columbia recognize Juneteenth either as a state holiday, a ceremonial holiday, or as a day of observance.

Since becoming NCUA Chairman more than 14 months ago, Hood has made fostering greater financial inclusion a priority for the NCUA. During that time, he has advanced a regulatory agenda that has reduces the regulatory burden on credit unions while fostering greater innovation and flexibility so credit unions can meet the evolving needs of their members. 

“Financial inclusion means expanding access to safe and affordable financial services for unbanked and underserved people and communities as well as broadening employment and business opportunities,” Hood said. “We all must work together because all of us have a stake in the outcome. We all benefit when more of our citizens can control their financial futures and enjoy the benefits and opportunities this nation provides.”

Congressional Report Details Efforts to Preserve Minority Credit Unions

In the spirit of fostering greater financial inclusion for all Americans, the NCUA also issued today its annual report to Congress detailing the financial condition of minority credit unions in 2019 and the agency’s efforts to preserve and promote the formation of minority depository institutions.

The 2019 Annual Report to Congress on Preserving Minority Depository Institutions is available on the agency’s website. This report to Congress is submitted in accordance with Section 308 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and Section 367 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

A federally insured credit union can qualify as an MDI if 50 percent or more of its current members, eligible potential members, and board members are minorities. A “minority” is defined as any “Black American, Asian American, Hispanic American, or Native American,” as defined in Section 308 FIRREA Act.

MDI credit unions are often the only federally insured financial institution available in rural and urban communities that have been historically unserved by traditional financial institutions. 

At the end of 2019, the NCUA regulated 514 federally insured credit unions with the MDI designation in 36 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. MDI credit unions served more than 3.9 million members and had assets of $40.5 billion. Approximately 10 percent of all federally insured credit unions are MDIs. These institutions are generally small — 57 percent of them have less than $10 million in assets. 

Through the NCUA’s MDI Preservation Program, MDI credit unions have access to grants and loans, training and technical assistance, and guidance from their examiners. In 2019, the NCUA:

• Chartered one new MDI credit union, Otoe-Missouria in Red Rock, Oklahoma; 
• Provided 58 low-income-designated MDI credit unions with $738,000 in technical assistance grants; and
• Provided three MDI credit unions with nearly $75,000 in grants under the agency’s mentoring program pilot. 

Building on the success of its MDI initiatives last year, the NCUA in 2020 has: 

• Co-sponsored the Freedman’s Bank Forum with the U.S. Department of Treasury and other federal financial institution regulators on March 3; 
• Hosted a two-day MDI Forum on March 3–4; and
• Made $125,000 available to support MDI credit unions through our MDI mentoring program.