NCUA Chairman Todd M. Harper
“Unity is strength... When there is teamwork and collaboration, wonderful things can be achieved.”
― Mattie Stepanek, American poet
On Monday, we will swear in a new President. Consistent with the Federal Credit Union Act, the new President will select a new NCUA Chairman. Before that transition takes place, I write to express my deepest thanks for all that we achieved together these last four years. Serving as the twelfth NCUA Chairman has been one of the greatest honors of my life.
Leading the many talented and dedicated professionals of this agency, including you, is something I will long remember and cherish. Together, we accomplished much and overcame unprecedented challenges, like the COVID-19 pandemic and the 2023 liquidity crisis. As part of a dream team, we — together — made the credit union system safer and more resilient, increased fairness and protections for credit union members, and advanced equity to ensure the credit union system worked better for all Americans, especially those of modest means.
In making the credit union system safer and more resilient, we fully implemented the risk-based capital rule and simultaneously created a simplified option to measure capital adequacy for complex credit unions with more than $500 million in assets. To align our ratings with those of the federal banking agencies and a majority of state credit union regulators, we added the “S” component to the CAMELS system to better measure a credit union’s sensitivity to market risk. The NCUA team also demonstrated great agility in responding to the marketplace shocks after the failure of several large banks in the first half of 2023. Notably, that teamwork resulted in new internal dashboards and growth in the membership of the Central Liquidity Facility.
Further, we made considerable strides in addressing cybersecurity vulnerabilities. Namely, the NCUA strengthened our supervisory program with the implementation of the risk-focused Information Security Examination. We also finalized the cyber incident reporting rule. In the first year alone, that rule resulted in more than 1,000 reportable cyber incidents. And, seven out of ten of those reportable cyber incidents were related to credit union vendors, underscoring the need for Congress to reinstate the NCUA’s third-party vendor examination authority, a statutory change for which I have consistently advocated.
During these last four years, the Board also finalized rules with an eye toward the future. The NCUA’s financial innovation final rule codified several long-standing supervisory guidance letters on third-party due diligence, indirect lending, and loan participations. The rule also gave credit unions greater flexibility in leveraging fintech partners and products. Further, the NCUA finalized a rule requiring credit unions to have a process for succession planning, a critical measure that addresses the cause for many unplanned or unforced mergers.
Additionally, the NCUA enhanced our consumer financial protection program to better ensure that consumers receive the same supervisory protections regardless of their financial services provider of choice. We, for example, worked with the Consumer Financial Protection Bureau and Department of Justice on investigations of credit unions that engaged in racial redlining, failed to follow fair lending mandates on age and marital status, and violated consumer financial protection laws and regulations. To promote transparency for both consumers and the industry, we also mandated that beginning with the 2024 first quarter Call Report, federally insured credit unions with more than $1 billion in assets separately disclose income from overdraft and non-sufficient funds fees. And, we created new consumer compliance specialist positions in the regions.
We also vigorously engaged with our partners in the interagency process, including leading the Federal Financial Institutions Examination Council for two years. The NCUA team further collaborated with the other federal financial regulators to finalize a rule requiring automated valuation models to incorporate fair lending principles and comply with nondiscrimination laws, finalize guidance on the reconsideration of value for residential real estate valuations, and study and reverse the undervaluing of properties due to racial or ethnic bias — a long overdue issue.
Moreover, I’m especially proud of the progress we made in advancing diversity, equity, and economic inclusion within the credit union system and at the agency. That’s important work because the statutory mission of the credit union system is to meet the credit and savings needs of members, especially those of modest means.
Minority depository institutions, or MDIs, are a sizable and important part of the credit union system. Because MDIs operate differently than other credit unions, we tailored our exam procedures to adopt an apples-to-apples approach of comparing MDIs to their peers. Through the new Small Credit Union and MDI Support Program, we provided customized assistance to resolve operational issues and identify new opportunities for the institutions that are at the heart of the credit union system.
After Congress created the Emergency Capital Investment Program to support the communities of color and low-income households hit hardest by the COVID-19 pandemic’s financial and economic disruptions, the agency moved expeditiously to finalize a rule to maximize the potential of this low-cost capital by allowing participating credit unions to hold this funding over 30 years. In all, federally insured credit unions have received more than $2 billion in capital investments under this initiative.
What’s more, we held annual summits during each of the last four years to highlight the importance of diversity, equity, and inclusion within the credit union system. We also initiated annual MDI symposiums to allow leaders at these institutions to listen, engage, network, learn, and gain access to new resources. And, we recently finalized a rule to provide individuals with a past minor indiscretion with the law a needed second chance to earn an honest wage and purse a rewarding career in the credit union system.
While we accomplished many initiatives as a team, my number one priority has always been your wellbeing and creating a welcoming and inclusive environment. In 2023, we hired more than 100 new examiners to replenish our depleted examiner ranks, better ensure the NCUA’s own succession planning, and enhance our ability to protect credit union members, the Share Insurance Fund, and credit unions. Moreover, in recent years, two out of every five new hires came from diverse backgrounds, and four out of every ten NCUA team members now belong to at least one employee resource group.
In 2022, we raised for the first time ever the Pride flag at our central office to recognize the start of Pride Month, doing so every year since. As a gay man who began his career 35 years ago living in a closet, that was a remarkable day for me. We also began to annually fly the Juneteenth flag. And, in July 2023, we held the agency’s first national training conference in nearly a decade that brought employees across regions and program offices together for teambuilding, training, and leadership development.
These efforts to build a culture of belonging and respect ultimately led to the NCUA being once again recognized as a Best Place to Work in the Federal Government by the Partnership for Public Service. Our global satisfaction, employee engagement, performance confidence, diversity, and belonging index scores have all increased in recent years, and we must keep that momentum going.
Of course, none of these accomplishments would have been possible without all of you. Every one of you has made important and meaningful contributions to the agency’s success these last four years for which I cannot thank you enough. In that regard, I must thank the career executive core at the NCUA who keep things running smoothly in the central office and the regions.
But, I must thank several people by name. First, thank you to NCUA’s Chief of Staff, Catherine Galicia, for her incredible leadership and guidance these past years, including as I overcame considerable personal health challenges last year. Catherine has been the engine behind so much of what we’ve accomplished. I’m also grateful for the work, support, and perpetual optimism of our Confidential Assistant, Jean Carroll. Further, I thank Elizabeth Eurgubian and Sam Schumach for leading the Office of External Affairs and Communications and advancing the NCUA’s legislative priorities. While both Elizabeth and Sam will soon depart the NCUA, I know that others will gain from their leadership and insights.
As Chairman, I have sought to follow the principles of a servant leader and to lead with the values of honesty, humility, humanity, and humor. I’ve also sought to provide a vision, voice, and vulnerability to inspire each of you to achieve your very best. It is my sincere hope the NCUA and the credit union system are in a stronger and more sustainable position because of our work.
Please know this message is not a goodbye. I will continue to serve as an NCUA Board Member and will work to advance important priorities for credit union members, the system, and the agency. I look forward to working with all of you and my Board colleagues — including our new Chairman who will successfully lead the NCUA in his own unique way — on these many endeavors. And, I especially look forward to continuing to speak with each of you during my weekly call time to congratulate you on promotions, significant work anniversaries, and notable accomplishments. My call time with you has been and will remain my favorite part of the week because it’s how we connect with each other and how I learn about issues.
As always, be safe, be well, be kind. Thank you for all you achieved and all your support. It means the world to me!