As Prepared for Delivery on November 8, 2019
Thank you so much for having us tonight. It’s a pleasure to be here.
Thank you, Reverend Whitlock and your staff for hosting this event. It’s a reminder that houses of worship serve as foundations for their communities as well as being places where members practice their faith. The two go hand-in-hand.
Throughout the course of my career, which began as a missionary, I have believed that bringing people together to share resources, ideas, and talents is the best way to build strong, sustainable communities.
I’m with you tonight in my role as chairman of the National Credit Union Administration. That’s the independent federal regulatory agency that supervises and protects America’s credit union system, which has more than 118 million members and more than $1.5 trillion in assets.
Given the size of the credit union footprint, and their roots in local communities, they’re an ideal vehicle for helping to encourage small business development at the grassroots level. In terms of commercial lending, credit unions may do less small business lending today than traditional banks, but that only means there’s a tremendous growth opportunity there.
The importance of small businesses in our economy, to our individual communities, is readily apparent. Nationally, small businesses generate 44 percent (opens new window) of U.S. economic activity. They drive innovation; they create jobs, which promote human dignity as well as financial security; and they, too, serve to anchor communities.
But do we do enough to truly support this vital sector? I would say “no, we do not.” It’s something that we need to do better.
Financial institutions, like credit unions, provide the oxygen small businesses need when they make investments through lending. Credit unions – and we should recognize that even the largest credit union started as a small institution providing access to credit to members on a local basis – are well-positioned to understand this and to build on it.
To do this, we need to bring new thinking to the table. How can we build a regulatory system that’s effective without being excessive? How can we stimulate more commercial lending and support more growth in the small business sector? In our discussion this evening, I’ll touch on a few things that credit unions are doing, or can do, to better address these needs.
As I noted before, it’s not something we can do alone – it’s going to require partnerships and a sense of shared mission.
As just one example, last April, the NCUA and the U.S. Small Business Administration launched a three-year effort to bring small businesses and credit unions together and expand awareness of SBA programs. That’s an example of how government agencies can work together to promote these shared ideals and make a difference.
But fundamentally, the revival of the small business sector starts in local communities, with local entrepreneurs and leadership. Agencies like the NCUA, the SBA, and other government entities can do plenty of things to help construct an environment that’s more conducive to small business growth – regulatory reforms, grants and loans, opportunity zones, and so forth. Those are all part of the solution.
But it’s that local commitment that will make the most powerful difference. And I believe that’s where credit unions, as lending institutions rooted in the local community, can play a leading role.
I want to encourage credit unions to think creatively about how they provide the lending services and innovative financial products that allow small businesses to thrive. But that won’t be done most effectively from an office in Washington, D.C.
The reality is that the institutions we oversee are much closer to the action, they have their fingers on the pulse of what works best in their communities and within their fields of membership. So let’s give them the tools they need to do that, while observing all the prudential needs of ensuring the safety and soundness of the industry.
So if you find yourself wondering why the head of a federal regulatory agency is here at this local small business summit — well, it’s because I’m hoping to learn from all of you.
I look forward to hearing more about what you all need to create a small business revival here in this community, so that I can take that knowledge back to my team in Alexandria and work to shape an agenda that makes that dream a reality.
I look forward to answering your questions and telling you about what we’re doing at the NCUA, but more importantly, I’m looking forward to what I can learn from all you that will help us make better decisions at the federal level.