NCUA’s Hood Discusses Taxi Medallion Sale, Financial Inclusion, and Guidance Review

Chairman Addresses CUNA Governmental Affairs Conference

WASHINGTON, D.C. (Feb. 25, 2020) — In his speech today before members of CUNA, NCUA Chairman Rodney E. Hood shared his vision for financial inclusion in rural America and elaborated on the agency’s decision to sell the majority of its taxi medallion portfolio.

“I understand this decision may not be popular or satisfy everyone,” said Chairman Hood. “But, the collapse of the taxi medallion market, and the failure of several credit unions that supported the taxi industry has already cost the Share Insurance Fund approximately $750 million dollars.”

Hood made his remarks during CUNA’s Annual Governmental Affairs Conference. His full speech is available on the NCUA’s website.

He also addressed concerns CUNA expressed to him in a letter dated January 22, as the NCUA, as liquidating agent, was consummating the sale, including:

• An in-depth evaluation of the taxi medallion portfolio’s size, characteristics, and condition of assets;
• Consultation and recommendation from a third-party advisor to sell the assets in a bulk sale;
• The thorough process of vetting bidders to make sure only bids from reputable and experienced firms dedicated to working in a good-faith manner with borrowers were considered; and
• The statutory obligation to achieve the least possible long-term cost to the Share Insurance Fund.

The Chairman also discussed plans for his rural initiative, which focuses on boosting financial inclusion in rural America.

“One of the things I’m most excited about, and which we’ll be discussing in greater detail in the coming weeks: The NCUA is preparing a set of initiatives aimed at improving financial services in underserved, rural communities,” Hood said.

Chairman Hood also revealed the NCUA would conduct a comprehensive review of all the agency’s guidance letters and legal opinions to determine if they are still relevant in today’s regulatory climate. A review would help to reduce the burdens of compliance, complexity, and costs that weigh so heavily on both the regulators who have to enforce the rules, and on credit unions who have to follow the rules.

He also commended credit unions for their service to their memberships.

“One thing that I see in common in all the credit unions I visit is that strong sense of hope, a deep commitment — not for profit, not for charity — but to service, and a strong focus on the future,” said Hood. All of that is in keeping with the historic credit union tradition and ethos of ‘people helping people.’ That’s a tradition I look forward to working to advance in partnership with all of you.”