As Prepared for Delivery on June 25, 2020
Good morning and it’s my pleasure to welcome everyone. I call this open meeting of the NCUA Board to order.
Yesterday, the NCUA Board voted to remove the proposed rule on risk-based net worth from today’s agenda, and no earlier announcement of the change was feasible.
As in our previous Board meetings over the last several months, I will again note for the record that due to the COVID-19 pandemic, today’s meeting is open to the public via a live webcast only. Thank you, as always, to the NCUA staff who have stepped up to make it possible for us to continue operations during this difficult time by keeping the NCUA open for business.
I’d like to begin today with a few observations on the events of recent weeks. It was one month ago today that George Floyd died in Minneapolis while in police custody. There’s no question there’s a tremendous amount of pain and anger surrounding these issues of another instance of abuse of authority against a black man. But at the same time, I’m heartened by the responses I’ve heard from so many in the credit union community.
If there’s a common thread to what I’m hearing, it’s that people want to know what they can do that will truly make a difference. People want to move beyond platitudes and vague expressions of support, so we can focus on real changes that will have a concrete impact.
I appreciate that line of thinking, as it corresponds to my own beliefs, and to the goals, I have been working toward throughout my entire life.
The Importance of Financial Inclusion
One of those goals is financial inclusion, which I believe must be a top priority for those of us who work in and around financial services. While much of the policy focus in recent weeks has been on abuse of authority, if we truly want to make a difference in minority communities, we need to think more broadly about how we can create opportunity by bringing more Americans into the mainstream financial system. As you have all heard me say before, financial inclusion is truly the civil rights issue of our time.
Earlier this month, some of you may have seen an opinion column I wrote for the Wall Street Journal (opens new window) focused on what the financial industry could do to better promote financial inclusion. I was certainly glad to have the opportunity to present my ideas in a widely read venue like The Journal. But I’ll admit I only had about 500 words to make the case. Honestly, I could have written 5,000 words, and it still wouldn’t have been enough to get all my thoughts out there.
This piece is the continuation of a much longer conversation. And that conversation has been ongoing my entire life as a man of color. The conversation continues today.
I’d like to focus on a few things that we’re doing here at NCUA, and things we can do, to encourage and incentivize financial inclusion. This is not an exhaustive list, and I’m sure my colleagues and those in the public will offer other helpful ideas as we consider concrete action on these issues.
Continuing the Conversation: An Inclusion Agenda
Today, we have an item on our Board agenda that should be an important part of that conversation. The NCUA has just published our annual report on minority depository institutions, detailing the progress MDIs have made over the last year and our efforts to preserve and promote these important financial institutions. Given their importance to some of our most hard-press communities, we need to do everything we can to better support these vital institutions, so this report and this discussion are timely.
Secondly, we encourage credit unions to take the Annual Voluntary Credit Union Diversity Self-Assessment (opens new window). Last year we had 118 credit unions complete the survey. The year before that, we had 81. This is progress year-over-year, but it is not good enough. As the industry is looking for what it can do, this is a small step.
The diversity assessment is a valuable tool for credit unions seeking to make a stronger commitment to diversity, inclusion, and equity – it helps industry leaders to see areas in which they can strengthen that commitment, for the benefit of your employees, your members, and your communities. So, if you haven’t completed the assessment online at the NCUA website — you can find it at cudiversity.ncua.gov (opens new window). So please commit to taking the survey at your earliest convenience.
Third, many credit unions have been working diligently to incorporate more financial technology, or fintech, tools into their operations. We all know these tools are going to be an increasingly important part of improving customer service and efficiency, especially as the pandemic has driven more and more banking into a digital world. But let’s not overlook that these fintech tools can also be a very powerful way to connect with minority communities, rural communities, and other underserved populations.
Over the last year, I’ve been working with credit unions to better understand the regulatory framework they need to more effectively incorporate fintech to not only promote innovation but also to enhance access — access to minority communities and underserved communities. I hope we can accelerate that work. If leveraged appropriately, fintech can be of tremendous strategic importance in expanding access to quality, affordable financial services to these underserved communities.
And finally, we must face up to the reality that we still have much work to do internally here at the NCUA. This agency has long been a leader on issues of diversity and inclusion, and we strengthened that commitment earlier this year with the establishment of the Culture, Diversity, and Inclusion Council. But, for example, we also know that African Americans are underrepresented in the context of the Principal Examiner promotion process, which is something I’ve been working on since becoming Chairman and will continue to do so. We must always remember that if we’re going to “talk the talk” about the importance of equity, we must also be prepared to “walk the walk,” modeling equity in our own ranks just as we expect others to do.
As I often say, financial inclusion is the civil rights issue of our time. I repeat that so frequently because I truly believe it — and I truly believe it because I’ve seen how powerful it can be when we bring people into the system. Just last year, I spoke with a woman, a bus driver in Maryland, who had been outside the financial system. She joined a credit union and significantly boosted her credit score through a financial coaching program. This member built a credit score, over time, that resulted in her getting access to mainstream financial products and is now on the road to financial freedom.
Her story is a case study in how financial inclusion makes a real difference in people’s lives. It’s a success I’d like to see repeated again and again and again for Americans in communities throughout this country. I believe we can achieve that goal. I believe credit unions are an ideal tool for achieving that goal and I am looking forward to working with all of you over the course of my chairmanship to continue working toward that goal.