As Prepared for Delivery on June 9, 2020
Good afternoon, everyone. This is NCUA Chairman Rodney Hood. Thank you very much for joining us remotely for today’s memorandum of understanding signing ceremony with Export-Import Bank Chairman Kimberly Reed.
The last several months have brought serious challenges to our economy at every level. Throughout this difficult time, the NCUA, as a financial regulatory agency, has sought to respond first to the immediate challenges posed by the pandemic. That response has included a number of emergency measures and regulatory reforms aimed at keeping credit unions up and running for the sake of their members, while ensuring the safety and soundness of the credit union system.
At the same time, we’ve been working to lay the groundwork for the economic recovery that will follow this shock. That means looking for both near- and long-term solutions that will improve access to capital for job-creating businesses. That’s especially important for small businesses, which have been particularly hard hit by recent events.
One of those solutions is to point lenders and borrowers toward the support resources that already exist. You might think of this as the “low hanging fruit”: the resources are already available; we just need to educate people on how to access them.
We all know there are tremendous financing opportunities available for small businesses through various government grant programs, loan programs, and so forth. But for many entrepreneurs, it can be difficult to know where to start to gain access to those programs.
That’s where credit unions and the NCUA come in. We looked at the network of federally insured credit unions we oversee — 5,236 federally insured credit unions with nearly 120.4 million member-owners — and saw an opportunity for credit unions to serve as an information gateway to connect small business owners with these kinds of programs. Last year, we forged a similar agreement with the Small Business Administration, which has been highly successful.
Today’s agreement with the Export-Import Bank is in that same spirit. Under this agreement, we’ll be working with EXIM to develop educational and training initiatives on export financing opportunities to share with credit unions, so they can educate their small-business members about the available opportunities, such as an EXIM guaranteed loan being exempt from the member business cap of 12.25 percent. Helping small businesses to gain access to capital is essential, and we can anticipate that this collaboration will be a great help to many hard-pressed entrepreneurs, particularly the steep challenges they face in today’s environment.
Now, obviously, not all credit unions work with small businesses that handle export trade. However, for those that do, knowing where to turn for help with financing, and being able to share that information with small business borrowers, will be a tremendous boon.
The discussions that led to this agreement began many months ago, and I’m pleased that we’ve arrived at a final product we can share today and start putting into action soon. Given the immensity of the economic challenges we’re facing, the timing could not have been better. It’s one more tool we now have in place to help small businesses to get back on their feet, to create jobs, and to spur the economic recovery to come.
I’ll conclude by noting that the NCUA has had a long and constructive working relationship with the Export-Import Bank, and we’re excited about the opportunity to continue that relationship. So, Chairman Reed, thank you very much for your efforts in making this agreement a reality, and we look forward to working with you and your team to implement this MOU on behalf of the credit union industry and its members.