NCUA Chairman Rodney E. Hood Opening Statement During the Public Briefing on the Proposed 2021–2022 Budget

As Prepared for Delivery on December 2, 2020

As I said last year, I believe that consideration of the agency's budget is one of the most important responsibilities that we as the NCUA Board are charged by Congress to do. The budget sets forth not only how we plan to spend money on expenses related to the operations of NCUA, but also how we align resources in support of our important mission of safety and soundness. It is important to note that NCUA is commitment to stewardship does not end with the adoption of the budget, but continues with how we actually spend the funds we collect. We must be mindful that the funds the NCUA receives are not ours but are credit unions.

I should note for the record that the NCUA publishes a very detailed description of its planned budget and other financial documents on our website. Transparency of the NCUA budget process, including the opportunity for direct public comment from stakeholders to the Board that decides the budget is unique for the NCUA among other financial regulators.

Pursuant to the Federal Credit Union Act, final decisions on the NCUA budget are vested with the Board. We take all public comments seriously and under advisement before making a final decision.

I want to thank all of the participants for being part of this process.

I especially want to thank all of our NCUA staff who have all played a role in helping to draft this budget proposal. The NCUA Board and the NCUA staff are responsible for overseeing the safety and soundness of the country's credit union system and protecting the National Credit Union Share Insurance Fund. Our actions affect over 5,000 credit unions that serve over 120 million member owners.

I know that budget for 2021-2022 was a challenging one for the staff to pull together, in light of the impacts the COVID-19 pandemic has had on credit unions and NCUA operations, and in anticipating and planning for what might happen in 2021. This presents many uncertainties in which they did their budget planning.

In developing a draft budget, staff has weighed and balanced the need to execute the NCUA mission and the increased workload the agency may see in 2021, against the need to be fiscally responsible and prudent in light of the economic stress on credit unions.

Recognizing that NCUA resources come directly from our credit unions, we should take great care when directing the agency’s limited resources to open-ended new commitments. And we should seek to avoid new compliance requirements without fully considering their impact on credit unions.

Additionally, the commitment to consumer financial protection is not new to this agency. In fact, it goes hand in hand with our safety and soundness mission. Before we consider additional layers of oversight, I think it is important to note existing NCUA consumer compliance practices. It is imperative that we strive to keep a healthy balance between the appropriate level of oversight needed to ensure consumers are protected and the flexibility credit unions need to provide the highest levels of service to their member-owners.

To understand why, it’s worth considering the substantial level of resources the NCUA already has dedicated to consumer protection. The agency’s Office of Consumer Financial Protection has 25 dedicated staff members who provide critical oversight and leadership in this area. In addition, the NCUA’s Consumer Assistance Center provides an avenue through which credit union members can report concerns they may have about their treatment at their credit unions. We take these complaints very seriously and follow through on all of them, with the aim of resolving them to each member’s satisfaction.

When it comes to working with credit unions, our goal is to facilitate their safe and sound operation while ensuring they fully comply with applicable laws. Toward that end, we emphasize a compliance approach over an enforcement approach, providing credit unions with clear guidelines and incentives to ensure they prioritize consumer protection. When a compliance issue does arise, as is inevitable, we strive to detect and resolve problems in credit unions before they become insurmountable.

I would be willing to create a CFPB-like program at the NCUA if the CFPB returns credit union supervision back to the agency, something that our General Counsel has opined is permissible for the CFPB to do under existing law.

We can all agree that consumer financial protection is vitally important, and while I have my views, I look forward to working with my board peers as we consider this issue further before the final budget vote.