NCUA Chairman Rodney E. Hood Remarks - Second-Chance Interpretive Rule and Policy Statement

As Prepared for Delivery on November 21, 2019

I am glad to see this final guidance come before the Board today, and I would like to thank staff for their work on the “Second Chance IRPS.”  As NCUA's Chairman, my primary job is to protect the safety and soundness of the credit union system.  But where appropriate, I also want to encourage the industry to take reform-minded steps to better meet the needs of the communities credit unions serve.  The rule before us today does just that.

Of the nearly 77 million Americans with some kind of criminal record, many of them pose no risk to society.  They may have made a foolish mistake in their youth, but decades later these Americans can still face hiring barriers that leave them underemployed.

These individuals represent a significant potential economic resource, particularly in a tight labor market, but many have difficulty finding employment even many years after paying their debt to society.  Expanding career opportunities for those who have taken responsibility for past indiscretions is consistent with our nation’s redemptive spirit, but it could also be an opportunity for credit unions.

In the financial sector, there are particular sensitivities.  For instance, it would be difficult to make the case for a job applicant with a past financial crime that would undermine customer trust, like embezzlement, money laundering or identity theft.  However, when considering potential hires, an exemption may be warranted if the applicant poses no risk to the safety and soundness of the financial system.

The rule before us today will provide regulatory relief by expanding the exceptions to the employment restrictions under Section 205(d) of the Federal Credit Union Act, thereby reducing the number of applications that will have to come before the Board for our consent.

Most of all, this is not only about regulatory relief but also it is simply the right thing to do.

I offer my full support of this final second chance rule before us today.