NCUA Vice Chairman Kyle S. Hauptman Statement on Proposed Interpretive Ruling and Policy Statement 13-1, Minority Depository Institution Preservation Program

As Prepared for Delivery on June 22, 2023

I think it’s remarkable that while the total number of credit unions in America is similar to the total number of banks, when it comes to minority depository institutions (MDI) there appears to be four times as many credit unions that qualify as MDIs. The data I’ve been given is roughly 500 credit union MDIs vs around 125 bank MDIs. This could be a function of size, in that credit unions tend to be smaller institutions and that’s also true of MDIs, or perhaps it’s the nature of the field of membership and affinity groups.

Either way, it’s important that any group that succeeds in forming a credit union has every opportunity to keep that credit union alive as long as feasible. If a given field of membership wants their own, separate financial institution, an agency that cares about inclusion should take every appropriate step to allow that group to keep their institution alive. That means the NCUA shouldn’t push for credit union mergers unless it’s absolutely necessary. That means the NCUA has to have internal accountability around our chartering process.

While no financial institution should be too big to fail, they also shouldn’t be too small to succeed. Today’s Board item touches on ways to help a group continue to have their own financial cooperative. Someone, at some point in the past, put in a lot of effort to start a new credit union. This Board item speaks to resources to keep those credit unions alive and thriving.

One issue I’d like to address is how we can make credit union management comfortable asking for assistance from the very same agency that is grading its management’s abilities.