Thank you very much. I appreciate your joining us today.
I am delighted to welcome all of you as we commemorate the signing of the Federal Credit Union Act by President Franklin D. Roosevelt, which occurred on this day in June 1934.
Eighty-five years later, federally insured credit unions are stronger than ever, offering a variety of financial service products, including mortgages, consumer loans, and business loans, to tens of millions of Americans.
The rise of the credit union movement is a story of expanding economic opportunity, and it is a wonderful story to tell—because it was not always the case. These innovative financial institutions emerged in response to a great need, and in a time of great national trial.
A century ago, many Americans had trouble getting access to capital. If you were from a working or even middle class background; if you had a small business you hoped to see grow; or if you had a family farm where you needed to get your crops or livestock to market, access to credit was tough to come by.
Moreover, even if you could get that capital, it often came with high interest rates or the loan was structured in ways that made repayment difficult, if not impossible.
Then, when the stock market crashed in 1929, what credit might have been available suddenly dried up. Thousands of businesses of all sizes closed, millions of people were out of work, and the nation sank into a devastating economic depression.
Difficult times demanded creative thinking, and that was the backdrop that Congress drafted the Federal Credit Union Act.
But the most important story to tell here is not about legislation, or credit, or even financial institutions. Instead, it is a story about people helping people, in their own communities.
It is important to note that credit unions arose and grew not out of government fiat. Instead, they grew from a grassroots movement of people who were forgotten and were being left behind. And this movement grew from people who wanted to solve problems like:
- How can we find a new way to extend access to credit to Americans in the hardest to reach places?
- How can we extend a helping hand to people in rural areas, or in underserved communities?
- How can we help people with small means and in communities that are being overlooked or passed by?
Credit unions—“a national system of cooperative credit,” offered through locally based, member-owned financial institutions that could provide affordable, quality credit and saving services to those in need—would be one key solution to that problem. At every step, it was about the promise of people helping people. It was the promise of people working together to use their assets to invest in their communities.
It was not a completely new idea. Credit unions did exist prior to the federal law – they were chartered by states. But the Federal Credit Union Act laid the groundwork for the comprehensive system we now have.
That regulatory framework would lead to increased trust, confidence, and accountability, which allowed these vital local institutions to expand, to thrive, and to give back to the communities they serve.
Overseeing the credit union system to ensure safety and soundness is the NCUA’s critically important mission. Every day, our people are responsible for ensuring that credit unions live up to the values embedded in its original conception.
As a result, millions of Americans—117 million, at last count, and growing—know they can confidently entrust their savings and their financial well-being to their credit unions. They can rest easy knowing their savings are insured by the NCUA. That trust and confidence is reinforced as credit unions accept those deposits and turn them into loans for small businesses and working families, creating jobs and economic opportunity in the communities they serve, in a virtuous circle.
With a stroke of his pen, President Roosevelt made it possible for teachers; police officers and firefighters; military personnel and their families; parishioners; skilled tradespeople and so many others across the country to pool their resources and organize credit unions. Loans could be provided to members based on the consideration of their character, as well as their ability to repay.
This grassroots movement led to a further democratization of banking and credit and contributed to the economic rebirth of the country following the Depression.
Through times of conflict and times of relative calm, through economic booms and busts, through societal and technological changes, credit unions have carried on that tradition in serving their members and communities. They have kept the promise of people helping people.
Many of the people here today played a role in making that possible. I want to recognize and give our thanks and appreciation to the NCUA board members in attendance. Your leadership has contributed greatly to the strength and success of federally insured credit unions. We thank you for your commitment and service.
But most of all, I want to thank our employees, both past and present. This agency’s success stems entirely from your dedication to the highest standards of professionalism and public service. Thank you, and we salute your service to credit unions, their members, and the citizens of this great nation.
We are looking back today to celebrate a historic achievement. But the more important job is to keep our eyes on the future, and on where this industry is headed.
We should expect opportunities and tremendous challenges as credit unions adapt to technological and market changes. Many of us in this room, and those who follow us, will need to be prepared to respond to those opportunities, challenges and changes with integrity, foresight, and prudence.
I am confident we will meet those challenges and embrace those opportunities. Our goal is to ensure the safety and soundness of credit unions, so this vital industry can carry on the Federal Credit Union Act’s mission, and I quote, “to make available to people of small means credit for provident purposes,” end quote.
Just as the drafters of the law and President Roosevelt envisioned 85 years ago, credit unions are continuing to help working people. I believe they would be proud of how far we’ve come since that auspicious beginning. Thank you.