As Prepared for Delivery on May 22, 2025
Opening Statement for the Board Meeting
Now, we have two items on today’s agenda. The first is the quarterly briefing on the performance of the Share Insurance Fund. The second is a briefing on the NCUA’s Voluntary Separation Program.
There has been a lot of speculation about the NCUA’s Voluntary Separation Program floating around the media, credit unions, and even within the NCUA. While agency leadership has made every effort to keep staff informed since the program’s rollout, anything of such importance and sensitivity is bound to generate rumors.
Today, we will provide more clarity on the VSP. The upcoming presentation is an evolution of the version originally scheduled for the cancelled April Board meeting. Today’s presentation will provide the public with more details about program participation and a clearer picture of the agency’s path forward.
Before we move over to the briefings, I want to highlight some important events over the past couple of months.
As you know by now, new charters are one of my priorities. Credit unions are one of the original answers to challenges of true financial inclusion. I commend and congratulate the organizers of Heritage Hub Federal Credit Union in Houston, and African Diaspora Federal Credit Union in St. Louis. They are our first two federal charters of 2025, and both offer the promise of financial security and well-being to members of their respective communities.
These groups are doing what Americans have done for over 100 years: starting their own credit union because they obviously weren’t entirely satisfied with the current financial services marketplace.
The number of credit unions in America, and the number of new credit unions needed, should be a matter decided by American consumers, not anyone in government. And it goes without saying that the best consumer protection is a competitive marketplace. The organizers of these two new credit unions worked alongside members of NCUA’s Credit Union Resources and Expansion team through the chartering process. I appreciate the efforts of NCUA staff in moving these applications through the process.
To that end, the NCUA’s processes must facilitate, rather than impede, the formation of de novo credit unions. The agency has made strides in reducing the pain points for organizers to apply for a federal charter in their communities, and I appreciate the hard work of NCUA staff in this process. The agency must continually adapt and improve, just as the institutions we supervise do day-in and day-out.
As for the next piece of good news, in late March, the NCUA released Valwood Park Federal Credit Union from conservatorship, thereby returning control to its member owners.
Placing a credit union into conservatorship is a difficult decision and one that the NCUA never takes lightly. Thankfully, conservatorship is not a one-way street. And Valwood Park and NCUA’s Southern Region deserve acknowledgement for taking decisive action to save the credit union.
Once a credit union has left a community, rarely does anyone come to fill its place. Putting a conserved credit union back in the hands of its member-owners is a financial redemption story and a testament to the hard work of new management, staff, and member-owners to bring a credit union back from the brink. So, congratulations again to everyone involved in this effort.
Statement Following the Share Insurance Fund Quarterly Briefing
Thank you, Melissa and Eugene, for your presentation on the performance of the Share Insurance Fund in the first quarter of 2025.
I would like to take a moment to acknowledge the change to the presentation format. Your team, particularly Mei Xu, has done a wonderful job contextualizing the information and providing the story behind the numbers. Tremendous work.
It is good to know the Share Insurance Fund remains strong. The Fund reported a net income of $79.8 million, a $1.2 million increase from the fourth quarter of 2024. The Fund’s assets increased 3.14 percent in the first quarter to $23.0 billion.
In the first quarter of 2025, there were no credit union failures incurring losses to the Share Insurance Fund.
Current economic conditions are relatively solid. Employment is rising, wages are growing, and the unemployment rate remains at a relatively low 4.2 percent and has moved little since last summer.
Inflation has retreated from its peak in mid-2022, and headline consumer price inflation eased to 2.3 percent over the year ending in April — its lowest level in four years. All good news.
Related, the interest-rate gyrations of recent years also seemed to have subsided. As we sit here, the market expects the most likely scenario to be the Fed lowering rates by 50bps by year-end, with another 50bps by December 2026. That’s obviously a manageable scenario for credit unions.
The economy may be facing some downside risks, and uncertainty about the near-term outlook is elevated. Credit unions have dealt with today’s environment, and much more, in the past decades.
Ultimately, credit union managers and boards of directors must continue to exercise patience, flexibility, and sound balance sheet management to prepare for a variety of interest rate scenarios and economic conditions in the coming months.
Statement following the Board Briefing on the Voluntary Separation Program
Thank you, Larry and Amanda, for your presentation on the NCUA’s Voluntary Separation Program.
Before going any further, I want to acknowledge that large-scale organizational change can be very difficult for organizations and staff. I greatly appreciate the patience and understanding of the NCUA staff.
Executive Order 14210, “Implementing the President’s “Department of Government Efficiency” Workforce Optimization Initiative,” is meant to drive change across the federal government. To that end, each executive branch agency was tasked with identifying opportunities to maximize productivity and efficiency in its operations. Consistent with EO 14210, the NCUA Board approved voluntary separation programs that provided employees to depart the agency with certain incentives.
Throughout this process, my top priority was to design a program that provided employees with certainty, were voluntary and fair, and allowed the NCUA to meet its operational needs. That would not have been possible without the NCUA leadership and staff who conceived and implemented the final VSP.
As Larry and Amanda indicated, the two components of the VSP were the NCUA’s Deferred Resignation Program and the NCUA’s Voluntary Separation Incentive Payment for retirement-eligible employees. Both options were designed in a thoughtful, deliberate manner.
To the NCUA staff, each one of you had unique circumstances to consider in reaching a decision best suited to your situation. If you have chosen to depart the agency through one of these voluntary programs, know that I am grateful for your years of service and contributions. Your professionalism and dedication are greatly appreciated.
We were going to do this update last month, which would have been while these separation programs were still ongoing, and we wouldn’t know how many colleagues are departing.
So, one benefit of doing it today instead is we now have the actual numbers. We’re also now able to talk a bit about what the future NCUA looks like with a smaller staff. We’re not going to try to do the cliché of “doing more with less.” That doesn’t really work. We know we can’t lose more than 200 employees and think we’re going to have the same people do the same things in the same manner and at the same intervals.
I appreciate the terrific work of so many here to ensure we thoughtfully restructure. And one good thing about this job is we have one crystal-clear, mission-critical objective: Avoid a major loss to the Share Insurance Fund.
To that end, we’ve been engaging in an agency-wide dialogue on how to protect the Share Insurance Fund while we are restructuring. Each department head submitted a draft plan to deliver excellent service with fewer people. We were all asked to envision two stages of this restructuring:
Stage 1 is the rest of this year, since our cost savings don’t materialize until January. Thus, managers were asked what processes can be streamlined, delayed or eliminated.
Many of these ideas are just better practices regardless of any headcount changes. A minor example is it’s now quicker to login to our computers, and we’re fixing our convoluted, wasteful time-card process.
Those are small, unsexy examples, but every second matters.
Plus, as you might imagine, a monopoly government agency winds up with lots of processes, methods, and reports that folks keep doing just because someone in the past suggested it, without any real cost-benefit analysis on whether everything we do is the best use of our time and credit unions’ money.
So, we already feel “lighter” on our feet. We’ve reviewed all thresholds, such as how many layers of approval are needed for transactions of a certain dollar amount. We may well change these back in the future, but for now we need to make changes that allow us to focus on job 1: protecting the Share Insurance Fund. Everything else is less important.
Stage 2 of the future NCUA starts in January when we have millions in cost-savings to work with. Obviously, a lot of that cost-savings needs to be returned to the folks who earned it in the form of NCUA charging credit unions less money.
While we don’t want to be penny-wise and pound-foolish here – we still have over $2 trillion in assets to insure – it’s nevertheless true that a great way to ensure credit unions are financially stable is to give them back some of their money. Beyond that, in January we’ll be able to fill holes at NCUA with technology, contractors, and new hires.
Beyond the department heads, I’ve been on a mission to get suggestions from everyone here. I sent out the AskNCUA link to the all-staff email and asked for the AskNCUA tool to be changed to allow attachments to be uploaded.
I now have an AskNCUA folder on my Outlook, with all kinds of efficiency ideas, plus a few we politely disregarded. I’m sorry, but we’re not putting the thermostats in the summer at 78 degrees. We have moved or will move on to each good idea.
For that matter, I’d like to remind the public that anyone can use the AskNCUA tool on our website. You can submit anonymously if you wish.
So, send them in: what’s overly burdensome, what could be done better or quicker, what do you think NCUA is doing where the juice isn’t worth the squeeze? We can’t afford to ignore any ideas, certainly not right now.
Finally, for the majority who are remaining with the NCUA, I look forward to working with you as we re-imagine the agency’s future. Based on the excellent suggestions for improvement I have received from employees thus far, I have every reason to believe the future is bright, both for the agency and for the credit union system.