NCUA Board Member Tanya F. Otsuka's Remarks at the 2024 Diversity, Equity, & Inclusion Summit

As Prepared for Delivery on July 11, 2024

Good morning and thank you for joining the NCUA in beautiful Minneapolis, Minnesota. Thank you to the Office of Minority and Women Inclusion (OMWI) and the entire NCUA team for organizing this important event. I’m sorry I can’t be there in person to meet all of you and hear, first-hand, about your commitment to diversity, equity, inclusion, and accessibility.

As you have heard this week, your hard work and dedication to these principles increases inclusion and lessens barriers to equity and accessibility. This benefits your credit union employees, volunteers, and, even more importantly, the communities you serve.

Diversity, equity, inclusion, and accessibility within the credit union system is so critical, especially because credit unions are community-focused financial institutions. If the credit union doesn’t have representation from its community — from the board room to the front-line staff — it may be harder for the credit union to build trust and acceptance from the community it serves. We want credit unions to continue to grow and attract new members, and to carry out their mission of providing financial services to people of modest means.

We know that many communities have limited access to safe and affordable financial services, and the most marginalized are disproportionately impacted by this lack of access. According to the Philadelphia Fed, from 2019 to 2023, the number of bank branches declined by 5.6 percent overall, and these banking deserts may hurt more vulnerable populations like older people, disabled people, Native American and Alaska Native communities, and others who are less likely to have access to mobile and online banking, like rural communities. There are millions of people who do not technically live in banking deserts, but nevertheless do not have access to traditional financial services. The unbanked and underbanked often cite a lack of trust, high fees, and high minimum account balances as significant barriers. And, racial disparities in lending still exist today across income levels. Non-MDI banks reject Black and Brown borrowers at a rate that is two times that of their White counterparts, even when they have the same credit profile.

A commitment to DEIA principles alone will not close the racial wealth gap or put an end to all geographic and socio-economic disparities. But it does contribute to a more equitable financial system  and result in greater access to financial services, which benefits institutions and consumers alike. For example, there are several credit unions in New York City that accept IDNYC, a municipal ID card that is available to all residents of New York City, including people from some of the most vulnerable communities, such as those who are unhoused, justice-impacted individuals, immigrants, and others who may have difficulty obtaining a government-issued photo ID. ATMs and online banking may be convenient for some members, but it might not be as accessible for seniors, people with disabilities, or for those with limited transportation options, so some credit unions offer mobile branches to meet members where they are. Earlier this year, I visited a credit union in Maryland that adopted a more inclusive and accessible work schedule for their employees helped working parents and caregivers, but also benefited members and the institution, too. They were able to offer members longer business hours in the evenings, which resulted in more members being able to come in after work to apply for loans and receive other services.

That is why this year’s summit, DEI: Here to Stay, is a fitting one. I am encouraged by the many examples of credit unions doing this critical work, including many that are here this week. This is the work and the stories that we need to hear more of. And I want to thank those of you who completed the voluntary credit union diversity self-assessment and stress the importance of this valuable information. More participation from credit unions increases engagement in diversity, equity, inclusion, and accessibility practices across the financial services industry. One area we have seen significant improvement is in supplier diversity — credits unions are doing more business with minority-owned businesses in the communities they serve.

We are all guided by a commitment to a safe and sound system of cooperative credit, and ensuring that all communities have access to fair, affordable, and accessible financial products and services. As not-for-profit cooperatives, every credit union has a responsibility to contribute to a more inclusive financial system. I am dedicated to working with credit unions to reach under-resourced and marginalized communities.

Part of that dedication is a commitment to ensuring that small, low-income, CDFI, and minority depository institutions stay viable and competitive. Millions of families rely on these institutions for their financial well-being. I encourage you to read the recently published MDI Report to Congress and see for yourself the profound impact that MDIs and small credit unions have in bringing about financial empowerment in their communities. The NCUA also has many resources available through its Access initiative, grants to low-income credit unions under the Community Development Revolving Loan Fund, and free online classes on strategic planning and serving underserved communities. Earlier this year, we finalized our updated MDI policy statement, and the NCUA has several small credit union initiatives, including the small credit union exam program and small credit union support program.

Just last month, the NCUA celebrated the 90^th anniversary of the Federal Credit Union Act. In 1934, what started as a national acknowledgment of a powerful grassroots cooperative movement has resulted in more than 140 million Americans today being members of a credit union. But as we know, there is always more work to be done.

So, let’s continue to stay focused on these collective goals, and let us know how the NCUA can support your efforts. Thank you for joining us, and for being here to demonstrate your commitment to diversity, equity, inclusion, and accessibility across the credit union system.