NCUA Board Member Tanya F. Otsuka during a meeting of the NCUA Board.
As Prepared for Delivery on January 16, 2025
Thank you, Jim and Melissa for your presentation. The Annual Performance Plan is an important tool towards achieving the agency’s mission and simply just good governance. Transforming our agency’s objectives into measurable goals and metrics increases public trust and helps us at the agency hold ourselves accountable.
The 2025 performance plan reiterates our commitment to building our consumer compliance program and ensuring it is on equal footing with safety and soundness. To that end, we have once again set a goal of completing 60 fair lending exams in 2026. Last year, our fair lending team surpassed that goal and completed 64.
Unfortunately, lending discrimination is still a problem today, and in many cases, borrowers might not even know that they are being treated differently than others with similar credit profiles. And in some cases, credit unions themselves – particularly small credit unions – may not know they are violating fair lending laws. Credit unions may be relying on third-party programs or applications to help make lending decisions, but that might be causing them to run afoul of the law.
That is why it’s important for us to do these examinations. NCUA’s fair lending exams help ensure credit unions are treating all their members fairly. It can also help credit unions identify compliance gaps before they balloon out of control and work with us to remediate. Some of the cases the NCUA identified in 2024 involved discrimination based on age and marital status and redlining of Black and Hispanic communities. Who you are or where you live shouldn’t dictate whether you can get a loan.
Ultimately, the NCUA’s goal is to help credit unions fulfill their mission of providing financial access to those who need it most. The annual performance plan reflects the NCUA’s commitment to adopting a framework for an enhanced consumer compliance program for complex credit unions. While we have made significant strides in our fair lending exams, we also need to ensure that credit union members are being treated fairly when using a credit card or engaging in electronic payments. These are some of the issues we should address under the compliance framework, and I look forward to working with my fellow Board members on its implementation.
Finally, this year’s performance plan once again includes metrics related to strengthening the minority depository institutions, or MDIs, in our credit union system. Last February, this Board adopted improvements to our MDI Preservation plan. I am pleased to see us commit to operationalizing this plan in 2025.
The NCUA should continue to support the growth of MDIs. Nearly 500 MDI credit unions served more than 6.5 million members in 2023, a significant increase from 5 million members in 2022.
This is about a 26 percent increase in membership and a good sign that we are seeing more credit unions designate as MDIs.
Additionally, during the same time, total loans outstanding among MDI credit unions grew by more than 40 percent. And commercial and member-business lending increased by almost $1 billion.
Our preservation plan should propel this positive growth even further and build a framework that identifies struggling MDIs earlier on. That way, we can help outline creative solutions to preserve their MDI status before it’s too late. For some institutions, a merger might be the right decision to ensure long-term viability, but ideally that should be a decision that their board and membership make among a range of options, not because it’s the only one left.
I look forward to working with my fellow Board members and NCUA staff to achieve these and other goals in the performance plan. Thank you and I turn it back to Chairman Harper.