As Prepared for Delivery on October 8, 2019
Thank you for the kind introduction, and for the warm welcome. And thank all of you so much for being here today.
My job requires me to spend a lot of time traveling and meeting with people. When you spend so much time on the road and in airports, it’s always a pleasure to have an opportunity to come home.
And this is home for me. I grew up just down the road from here, in Charlotte. I went to college at Chapel Hill and my first job in financial services brought me back to Charlotte.
I’m in Washington now, but believe me, my ultimate goal will be to get back to North Carolina for good. So any opportunity I get to come home in the meantime is always welcome.
It’s been six months to the day since I was sworn in to lead the National Credit Union Administration. You know, a lot of people think about regulators and industry oversight, and they assume the relationship has to be adversarial. And there is something to that, at least part of the time.
But I believe that effective oversight also entails looking at what an industry is doing right, and recognizing the contributions of the people within the industry who are getting it right.
The NCUA has a solid professional relationship with this credit union. So when I look around this room today, and I see this many members taking the time out of their daily lives to attend their credit union’s annual meeting — that tells me that this institution is doing something right.
To prepare for this visit, I was glancing through SECU’s 2018 Annual Report just so you all know I’ve done my homework. And the numbers are striking:
- More than 2.3 million members, with 83,000 new members in 2017–2018 alone;
- Assets of more than $38 billion;
- Substantial increases in member deposits, mortgages and vehicle loans;
- Not to mention the thousands of volunteer hours and community service.
- In particular, I want to recognize the work of the SECU Foundation, which, in its fifteen years of operations, has made $169 million in investments in community good, like veterans’ and teachers’ housing, scholarships to North Carolina universities and community colleges, two cancer centers, and SECU Family Houses.
And that list goes on. The cover of the report says that SECU is “Going the extra mile” for its members, and based on those statistics, and based on the turn-out I see here today, I believe that’s true.
So, maybe others should be taking a closer look at what the SECU is doing for its members. Because clearly you all have a model that’s getting it right, and that’s something we want to encourage more of in this industry.
You are an inspiration.
And with that in mind I wanted to talk today about a few of my priorities at the NCUA. Of course, that’s a long list. I could spend half the day talking to you about things like regulatory reform or cybersecurity, until you begged me to stop.
But instead, I’d like to focus on what’s at the front of my mind, and because I believe it’s an area where the State Employees Credit Union has shown true leadership. And those are the issues of financial inclusion and diversity.
Responding to Change
We all know that we’re living in a time of rapid and unprecedented demographic change for American society. That change is bringing both challenges and opportunities.
I’m particularly proud of how the financial industry as a whole has played a leading role in stepping up to respond to that change in a positive and constructive way.
Let’s recognize that we’ve made progress, but we still have a steep hill to climb. Just consider the numbers: the FDIC published a study last year of “unbanked” Americans. They found that there are about 8.4 million households, more than 14 million adults, without a checking or savings account.
An even larger number, 24.2 million households, with close to 49 million adults, have accounts at an insured institution, but they also rely on alternative financial services or products outside the banking system, like pawn shops or check cashing services.
And as you and I both know, those “alternative financial services” rarely have the borrower’s best interests at heart. All too often those lenders end up locking working families into a punishing cycle of debt, making it more and more difficult to achieve financial security.
Your Salary Advance Loan and Savings Program is an example of how a credit union can address those needs.
We know we can reduce those numbers by helping these people get access to quality financial services. And once again, this is not just a challenge – it’s also an opportunity to keep “going the extra mile” to help under-served communities.
There’s so much more to be done, and I believe credit unions can be a leading force when it comes to diversity and inclusion. That’s because that’s a fundamental part of our industry’s history; diversity and inclusion is, and always has been, at the center of the credit union mission.
This is another area where State Employees Credit Union has shown leadership, working to heighten awareness of the benefits of a more diverse organization and moving to make diversity and inclusion a part of your organizational structure.
This is something I’ve spent a great deal of time talking about and thinking about over the last few months, because we just celebrated the 85th anniversary of President Roosevelt’s signing of the Federal Credit Union Act in 1934.
You look back to that time, and you see that the traditional banking system was overlooking an awful lot of people: working families, farmers, skilled tradesmen, and people of modest means. Credit unions would help those under-served communities to get access to credit, and the Federal Credit Union Act would help to establish the framework of trust, accountability, and transparency in which those cooperative credit providers could flourish.
So from day one, credit unions were committed to greater financial inclusion, accessibility, and opportunity for all Americans. That hasn’t changed, and I expect it to continue through this time of demographic and economic transition.
Thinking More Broadly About Diversity and Inclusion
When I talk about “inclusion,” I want you to know I am thinking in broad terms. First of all, we’re not only talking about minority populations. Obviously, when we’re trying to reach, say, African-American families, Latino families, or Native American families, there are specific issues and challenges that we face. And there’s no question we need to keep working to reach those populations.
But financial inclusion is not only about minority communities. We need to think much more broadly, and focus on extending access to all Americans who need these services so they can fully prosper.
That means we have to recognize the other dividing lines that affect your potential credit union members.
For instance, age is one of those dividing lines. We know younger Americans are far more likely to lack access to reliable credit and financial services, compared to older Americans. Accessibility for people with disabilities can be a dividing line, as well. Finding safe and affordable financial services can be a real challenge for far too many Americans with disabilities, which includes many of our Wounded Warriors and veterans.
Today, where you live is increasingly a dividing line, right? Take North Carolina — we have a number of thriving metropolitan areas, but this is still largely a rural state. Every one of us knows that we could walk out of this building, drive in almost any direction, and it wouldn’t take too long to find a rural community that maybe only a few decades ago was thriving and prosperous, but they’re hurting today.
I’ve seen these places firsthand. In fact, I worked with many of them when I got my start in financial services years ago, working in community banking with Bank of America in Charlotte, and when I served with the U.S. Department of Agriculture’s Rural Housing Service.
Maybe they had a textile mill that closed down, there’s nothing to replace those lost jobs. And suddenly they’re struggling, through no fault of their own. And so the community starts to lose population. Businesses close their doors. Property values slip, the tax base shrinks and public services suffer.
Soon enough, financial institutions start to pull out. Especially over the last decade, the withdrawal of financial services providers from rural America has posed a serious threat to financial access for the people who still live there. When communities lose financial access, it’s like cutting off the local economy’s oxygen supply.
So when I see that SECU maintains credit union branches in all 100 of North Carolina’s counties, I know you all must be doing something right on behalf of your members. And you’re setting an example for other credit union systems. I hope this is something other systems can study and duplicate in crafting their own rural service strategies.
As for the NCUA, we’re always looking for ways we can support you as you strive to meet these challenges. This is a shared commitment, and the NCUA takes this issue just as seriously as you do. We have some powerful tools at our disposal that can help when it comes to diversity and inclusion.
For instance, one of our tools is the low-income designation for qualified credit unions. This designation makes credit unions eligible for grants and loans from the Community Development Revolving Loan Fund, so they can expand options for business lending and secondary capital.
In 1990, there were only 184 of these credit unions in the United States, so their growth has been remarkable. We now have more than 2,500 low-income designated credit unions across the country. These low-income institutions have been a notable success in helping working families in underserved communities to improve their financial standing.
Likewise, we have a program to support minority depository institutions. These credit unions serve the financial needs of people and communities that have been long overlooked, and they bring significant value to their members and those communities.
And we’re looking for new ways to help the industry to navigate these changes. So just last week, we announced that on November 6, the NCUA will host our first Credit Union Diversity, Equity, and Inclusion Summit in Alexandria, Virginia. We plan to make this an annual event. We’re bringing together industry leaders, regulators, and policy experts for a day-long series of conversations focused on what the credit union industry can to do better advance these vital goals.
We also want to encourage the industry to continue offering different types of financial products that serve your members more effectively, and to find new ways to offer financial capability counseling to help low- and moderate-income families improve their financial position.
We know that a commitment to diversity and inclusion is an important business strategy for financial services providers of all kinds. But this is much more than just a good business practice — I consider financial inclusion to be the civil rights issue of our time.
For too long, too many people have been overlooked or locked out of the financial system, and we know that the lack of access to affordable banking and lending services holds working families back from taking that next step up the financial ladder. We need to remove the obstacles to financial security these Americans are facing.
That’s a goal I look forward to achieving with you.
Over the last several months, I’ve had the opportunity to visit a number of credit union sites around the United States.
Just last month, I was in Manchester, New Hampshire, to visit the America’s Credit Union Museum, on the site of the first credit union in the nation, which was founded 100 years ago.
In August, I visited the Polish and Slavic Federal Credit Union in Brooklyn, New York, where they were celebrating their 43rd anniversary and unveiling a remarkable historic exhibit commemorating the 80th anniversary of the Nazi invasion of Poland that set off the Second World War.
And in July, I visited the Destinations Credit Union in Parkville, Maryland, where they were launching a brand new partnership with Operation HOPE to offer financial counseling services in their branch.
What connects all of these places, across the history of the last century, is that they all reflect the basic credit union principle of “people helping people,” as SECU members know well. And the fundamental value that underscores that relationship is service to others and to the community.
As I mentioned, I graduated from college at Chapel Hill, where I had the good fortune of attending the university when the legendary Coach Dean Smith was leading the basketball team. Those were some good years for the Tar Heels, weren’t they?
Along with being one of the top coaches in college athletics, Dean Smith was also a student of leadership, and he was himself a great leader in the cause of civil rights and integration. And he understood leadership as a form of service. I’ve always appreciated Coach Smith’s observation that, "Good people are happy when something good happens to someone else."
Well, I look around this room and I see a lot of good people. And I look at SECU’s record and I see a lot of good things happening. So, let’s keep making sure that we work together to make something good happen for someone else. Thank you once again for hosting me today.