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NCUA Board Member Rodney E. Hood Statement on the Share Insurance Fund’s Quarterly Report

November 2023
NCUA Board Member Rodney E. Hood Statement on the Share Insurance Fund’s Quarterly Report
Rodney E. Hood

NCUA Board Member Rodney E. Hood during a meeting of the NCUA Board.

As Prepared for Delivery on November 16, 2023

Thank you, Mr. Chairman, and thank you, Eugene, as always for your continued thorough oversight of our National Credit Union Share Insurance Fund. I also want to say thank you to your team in OCFO for the great work they do to support these quarterly updates. I recently had the pleasure meeting with the entire OCFO team at their all-staff meeting, and you certainly have a very motivated and highly accomplished group.

Now going back to the business at hand, you all heard me say this before, but I view these quarterly updates as essential to give the credit unions and their member-owners a clear perspective on how we are being responsible fiduciaries of their Fund.

With that in mind, I do have some questions:

Are we still on track for the same projected earnings and equity ratio for year-end 2023, as you shared in the last quarterly Share Insurance Fund update?

We previously discussed the possibility of the NCUA investing some of its available funds directly with the Federal Reserve System. Are we still exploring those opportunities?

Where do we stand on our targeted amount of overnights? Have we reached it? And when is the investment committee meeting to determine the next steps?

Shifting gears, can we go back to slide five. Eugene, can you speak more about the credit union failures this year that caused a loss to the Share Insurance Fund? Were these cases due to fraud, or were there other factors involved?

Thank you, I think this really brings to light the importance of credit unions needing to be vigilant about fundamental enterprise risk management processes. I continue to emphasize the need for credit unions to always stay up to date on all the supervisory guidance and letters being issued by the NCUA, on topics other than fraud risk, including record keeping, interest rate, liquidity, and credit risks.

And lastly, can we turn to slide number four one more time? Focusing on our reserve balances, can you please elaborate on our method for calculating the reserve requirements? Why are our balances significantly more than our average Share Insurance Fund losses over the last five years? Do we base our reserve assessments on historical losses or an assessment of the future risk of loss within the existing portfolio?

Thank you, I have no further questions.

Rodney E. Hood Share Insurance Fund
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