Credit Union Exam Solutions Presents With Flying Colors

Ethan: I continue to
experiment with Artificial

Intellegence as we wrap up 2023.

This is With Flying Colors
and this is NOT Mark Treichel.

Rather is is an artificial
intellegence voice I have chosen

for this episode -known as Ethan.

This podcast is essentially an
audio book like version of a recent

speech by NCUA Chairman Todd Harper.

The Chairman leads NCUA.

While they only have one of 3
votes their power is vastly more

than the other board members.

The Chairman sets the agenda.

The Chairman - as outlined in the
Federal Credit Union Act is the

official spokesperson of the NCUA.

With a new democratic board member
coming on board soon, the Chairman's

power will go up This is why this
recent speech is worthy of covering

as a stand alone podcast - as it tells
you what Chairman Harper wants to

do - which can have a major impact on
credit unions, CUSOs, other entities,

members, and of course NCUA staff.

NCUA Chairman Todd M.

Harper's Written Testimony Before the
House Financial Services Committee

Chairman McHenry, Ranking Member
Waters, and members of the committee,

thank you for inviting me to
discuss the work of the National

Credit Union Administration (NCUA).

The NCUA insures deposits at federally
insured credit unions, protects

credit union members, and charters
and regulates federal credit unions.

The NCUA also protects the safety and
soundness of the credit union system by

identifying, monitoring, and managing
risks to the National Credit Union Share

Insurance Fund (Share Insurance Fund).

In my testimony today, I will discuss the
state of the credit union system, recent

efforts by the agency to strengthen the
system, and several legislative requests.

State of the Credit Union System

The credit union system over the
last year has remained largely stable

in its performance and relatively
resilient against economic disruptions.

However, during the last few quarters,
the NCUA has seen growing signs of

financial strain on credit union
balance sheets and in household budgets.

Economists are also forecasting an
economic slowdown as the lagged effects

of elevated interest rates take hold.

Each of these developments could
affect credit union performance

in the coming quarters.

Over the same period, the NCUA has
also seen growing stress within

the system because of a rise in
interest rate and liquidity risks.

In fact, this financial stress is
reflected in the increasing number of

composite CAMELS code 3, 4, and 5 credit
unions.1 Assets in composite CAMELS

code 3 institutions increased sizably
in the second quarter, especially

among those complex credit unions
with more than $500 million in assets.

Such increases may well
continue in future quarters.

We have additionally seen more credit
unions fall into the composite CAMELS code

4 and 5 ratings during the second quarter.

Credit Union System Performance

As of June 30, 2023, the system’s net
worth ratio stood at 10.63 percent.

There was continued year-over-year growth
in assets and lending, with system assets

surpassing $2.2 trillion and outstanding
loans at more than $1.5 trillion.

Although insured shares and deposits
decreased slightly compared to the

previous quarter, they stood almost 2
percent higher than one year earlier.

Second quarter data also
demonstrate some indications of

growing consumer financial stress.

The delinquency rate for loans rose
slightly to 63 basis points, although

it remains below historic averages.

Credit cards and automobile loans,
however, show increased delinquency levels

at 154 and 67 basis points, respectively.

Additionally, net charge-off levels
have risen over the last year,

returning to pre-pandemic averages.

Additionally, funding costs for credit
unions have increased significantly in

the rising interest rate environment.

Credit unions have increased their
issuances of time deposits, leading

to total interest expenses growing
substantially over the year.

However, the industry’s return on average
assets remains sound at 79 basis points.

Together, these numbers show the
credit union system continues

to rest on a solid footing.

External Factors Affecting the System

The NCUA is closely monitoring the
financial markets and the economy as the

current environment has created challenges
for some consumers and credit unions.

Inflation and interest rates
are affecting household budgets,

which could lead to an increase
in credit risk in future quarters.

In addition, the prevalence of hybrid
work environments has placed pressure

on commercial real estate lending.

While the credit union system overall
has modest exposure to this type of

lending, the NCUA is closely monitoring
individual credit unions with material

exposure to commercial real estate.

The rise in interest rates has also
increased liquidity and interest

rate risks in the credit union
system, including at several of the

421 federally insured credit unions
with more than $1 billion in assets.

Accordingly, the NCUA has emphasized
the importance of liquidity risk

management and contingency planning
in its industry communications and

will continue to ensure credit unions
conduct liquidity and asset-liability

management planning to address current
challenges and future uncertainties.

With respect to all these risks and
to protect the Share Insurance Fund

against potential losses, the NCUA
will continue to vigilantly monitor

credit union performance through
the examination process, offsite

monitoring, and tailored supervision.

The NCUA will also, when appropriate,
take action to protect credit

union members and their deposits.

Share Insurance Fund Performance

Backed by the full faith and credit of
the United States, the Share Insurance

Fund provides insurance coverage for
individual accounts at federally insured

credit unions up to $250,000.2 As of June
30, 2023, the Share Insurance Fund insured

$1.7 trillion in deposits and shares.

Notably, the Share Insurance Fund
protects nearly 92 percent of total share

deposits in the credit union system.

In comparison, uninsured shares and
deposits equaled approximately $160

billion in the second quarter or
8 percent of total share deposits.

The Share Insurance Fund
continues to perform well, with

no premiums currently expected.

As of June 30, 2023, the Share Insurance
Fund reported a year-to-date net

income of $79 million, a net position
of $20.3 billion, and an equity ratio

of 1.27 percent.3 The NCUA projects
that the equity ratio of the Share

Insurance Fund will end the year at
1.27 percent, which is sufficient but

below the 1.33 percent normal operating
level target set by the NCUA Board.

Given the liquidity events in 2023,
economic conditions, and the growing

stress in the credit union system from
liquidity and interest rate risks,

the NCUA Board decided to build up the
liquidity position of the Share Insurance

Fund to a targeted amount of $4 billion.

The Share Insurance Fund reached
that target in September.

The NCUA Board continues to monitor
liquidity in the Share Insurance Fund.

State of the Central Liquidity Facility

The COVID-19 pandemic, inflationary
pressures, interest rate volatility, and

liquidity risk have all underscored the
importance of the NCUA’s Central Liquidity

Facility (CLF).4 The CLF is an important
tool and acts as a shock absorber when

unexpected liquidity events occur.

Under the NCUA’s regulations, credit
unions with assets more than $250

million must have access to a federal
emergency liquidity source as part

of their contingency funding plans.

This federal emergency liquidity
backstop can be the CLF, the Federal

Reserve’s Discount Window, or both.

Credit unions with less than $250
million in assets are not required

to have membership with a contingent
federal liquidity source; however,

they must identify external sources
as part of their liquidity policy.5

As of September 30, 2023, the CLF had 399
consumer credit union members, providing

$19.8 billion in lending capacity.

These credit unions range in
asset size from less than $50

million to more than $10 billion.

Their access to the CLF helps
protect approximately $360 billion

in credit union members’ assets.

The more members the CLF has, the more
effective it is as a liquidity facility.

As of December 2022, the CLF had a
much greater total membership of 3,673

consumer credit unions with a combined
$537 billion in member assets and a

lending capacity of $27.5 billion.

This rapid decline in membership
assets followed the expiration of the

temporary statutory enhancements that:

Increased the CLF’s maximum
legal borrowing authority;

Permitted access for corporate
credit unions, as agent members,

to borrow for their own needs;

Provided greater flexibility and
affordability to agent members to

join the CLF to serve smaller groups
of their covered institutions; and

Gave the NCUA Board the clarity and
flexibility about the loans it can

approve by removing the phrase, “the
Board shall not approve an application

for credit the intent of which is
to expand credit union portfolios.”

Among other benefits, these statutory
provisions facilitated agent

membership of corporate credit unions.

These enhancements, however, ended on
January 1, 2023, resulting in 3,322

credit unions with less than $250 million
in assets losing access to the CLF.

Consequently, the CLF’s borrowing capacity
has decreased by almost $10 billion.

To address this expiration and growing
liquidity risks, the NCUA Board has

unanimously requested that Congress
allow corporate credit unions to purchase

capital stock in the CLF to help smaller
credit unions access to the facility.

This change would make the CLF more
affordable for corporate credit unions

subscribing for a subset of their members.

The Congressional Budget Office has scored
the CLF reforms at no cost to taxpayers.6

NCUA’s Efforts to Protect and
Strengthen the Credit Union System

In recent months, the NCUA has
undertaken several actions to respond

to cybersecurity risk; support minority
depository institutions; enhance the

credit union system’s and the NCUA’s
diversity, equity, and inclusion

efforts; and consider and adopt
new rules to strengthen the system.

Enhancing Cybersecurity

Cybersecurity threats within the financial
services industry are high and expected

to remain so for the foreseeable future.

To maintain vigilance against
these threats, the NCUA is

committed to ensuring consistency,
transparency, and accountability

in its cybersecurity examination
program and related activities.

Earlier this year, the NCUA
deployed its updated, scalable, and

risk-focused Information Security
Examination (ISE) procedures.

The ISE examination initiative offers
flexibility for credit unions while

providing examiners with standardized
review steps to facilitate advanced

data collection and analysis.

Together with the agency’s voluntary
Automated Cybersecurity Evaluation

Toolbox maturity assessment, the
new ISE procedures will assist

the NCUA in protecting the credit
union system from cyberattacks.

In addition, the NCUA’s recently
implemented cyber incident reporting

rule has proven to be helpful to the
agency and credit union industry.7 The

final rule requires a federally insured
credit union to report a substantial

cyber incident to the NCUA as soon as
possible but no later than 72 hours after

the credit union reasonably believes a
reportable cyber incident has occurred.

In the first 30 days after the rule
became effective, the NCUA received

146 incident reports, more than it had
received in total in the previous year.

More than 60 percent of these
incident reports involve third-party

service providers and credit union
service organizations (CUSOs).

The NCUA also actively communicates
with credit unions about the increased

likelihood of cyberattacks resulting
from geopolitical and other cyber events.

Credit unions of all sizes
are a part of the U.S.

critical infrastructure and
should implement appropriate

controls in the technology they
use to deliver member services.

Maintaining Consumer Financial Protection

An important part of the NCUA’s mission
is to examine credit unions with less

than $10 billion in assets for compliance
with consumer financial protection laws.

The agency’s consumer compliance
efforts are integral to maintaining

a safe-and-sound credit union system.

In 2023, the agency’s consumer financial
protection supervisory priorities have

included overdraft protection, fair
lending, residential real estate appraisal

bias, and Truth in Lending Act and
Fair Credit Reporting Act compliance.

The NCUA also prioritized examining
credit union compliance with the

Flood Disaster Protection Act,
including disclosure requirements.

In addition, the agency increased
its review of overdraft programs and

non-sufficient funds fee practices at
credit unions to assess whether providing

those services and charging the fees
are potentially unfair practices.

The NCUA’s supervision of the services
aims to create a more equitable system

that supports financial stability
for credit union members, improves

transparency, and advances the statutory
mission of credit unions to meet the

credit and savings needs of their members,
especially those of modest means.8

Furthermore, the NCUA conducts
targeted fair lending examinations and

supervision at federal credit unions
to assess compliance with federal

fair lending laws and regulations.

These reviews are critical to
identifying discrimination and

fostering financial inclusion.

In August 2023, the NCUA encouraged
the industry to review and comply with

previously issued guidance addressing
prohibited discriminatory practices

in automated underwriting systems.

Specifically, the agency encouraged
credit unions to review system

parameters to ensure compliance with
the Equal Credit Opportunity Act

and its implementing regulation.

In addition to appraisal bias oversight
examinations, the NCUA joined with the

other Federal Financial Institution
Examination Council agencies in

June to issue proposed guidance
for reconsideration of value for

residential real estate valuations.

The proposed guidance advises on policies
that financial institutions may implement

to allow consumers to provide information
that may not have been considered during

an appraisal or if deficiencies are
identified in the original appraisal.

As part of its consumer financial
protection efforts, the NCUA’s Consumer

Assistance Center also resolves consumer
complaints against federal credit unions

with total assets up to $10 billion
and, in certain instances, federally

insured, state-chartered credit unions.

In 2022, the Consumer Assistance
Center responded to 10,589 written

complaints, 1,842 inquiries, and
30,232 telephone calls from consumers

and credit unions concerning consumer
financial protection regulations.

Finally, the NCUA regularly presents
webinars promoting financial

literacy and financial inclusion.

Over the past year, the agency
has hosted webinars on appraisal

bias, elder financial abuse, and
minority depository institutions.

In addition, the agency participates in
national financial literacy initiatives,

including the interagency Financial
Literacy and Education Commission.

Supporting Minority
Depository Institutions

Supporting minority depository
institution (MDI) credit unions is a

longstanding priority for the NCUA.

MDI credit unions represent
approximately 10 percent of federally

insured credit unions, and there are
presently 498 such credit unions.

These MDIs have more than five million
members and exceed $66 billion in assets.

In 2015, the NCUA established its
MDI Preservation Program and has

since sought new ways to assist
MDI credit unions, their members,

and the communities they serve.

In 2022, the NCUA launched the
Small Credit Union and MDI Support

Program, allocating resources to
assist MDIs in addressing operational

challenges such as staff training,
examinations, and improving earnings.

In 2023, the NCUA allocated 10,000
staff hours across its three

regional offices for the program.

This year, the agency also issued
customized guidance to examiners to

provide insights into MDIs’ unique
business models and members’ needs.

The guidance assists examiners in
understanding MDIs’ distinct business

model compared to other mainstream
financial institutions by providing

instruction on how to use MDI peer metrics
instead of traditional peer metrics.

Notably, while MDIs tend to be smaller
institutions, they have relatively

strong financial performance.

As of the end of the second quarter
of this year, MDIs averaged about $133

million in total assets, yet their
return on average assets and net worth

ratios were higher than federally insured
credit unions overall and equal to credit

unions with assets exceeding $1 billion.

Meanwhile, their charge-off levels
were consistent with the levels

reported for both larger credit
unions and credit unions overall.

Congress recently authorized all MDIs
to be eligible for Community Development

Revolving Loan Fund grants and loans.

Previously, MDIs required the low-income
credit union designation to qualify.

In the 2023 grant round, 42 MDIs
received more than $1.4 million

in technical assistance grants.

The amount of funding MDIs received
was a five-fold increase from the

level of funding provided in 2022.

Finally, the NCUA in October hosted an MDI
Symposium that discussed how the agency

can better serve these institutions.

The MDI Symposium brought together MDI
credit unions and industry stakeholders to

learn about the challenges faced by MDIs.

Sessions included case studies
of successful MDI business

models for replication.

The NCUA plans to leverage this
information to further support

its MDI Preservation Program.

And, as part of the NCUA’s Diversity,
Equity, and Inclusion Summit for

credit unions in early November, the
NCUA held a session that discussed MDI

challenges and strategies for success.

Advancing Diversity, Equity, and Inclusion

The NCUA is fully committed to
fostering diversity, equity, and

inclusion (DEI) within the agency
and the credit union system.

The agency uses data from the
Federal Employee Viewpoint Survey,

including the Office of Personnel
Management’s Diversity, Equity,

Inclusion, and Accessibility
index, to inform its data-driven

DEI strategies and activities.9
The agency’s internal practices to

promote DEI are also wide-ranging.

For example, the NCUA’s employee resource
groups serve more than 30 percent of

agency staff, surpassing the industry
standard membership goal of 10 percent.

Further, the NCUA’s special
emphasis program educates staff

on cultural diversity and provides
dedicated support for employees

and managers with disabilities.

In addition, the NCUA routinely
recruits employees with diverse

backgrounds and seeks to ensure
broad applicant pools for vacancies.

These diversity recruitment
efforts are aimed at attracting

and retaining highly qualified
individuals from underrepresented

groups, including Hispanics and
candidates with disabilities.

In 2023, the NCUA conducted a
targeted barrier analysis to identify

hiring and retention challenges
for women and Hispanic employees.

In addition, the agency has consistently
exceeded the federal employment rate

goals for employees with disabilities
and targeted disabilities since

2017.10 Slightly more than 59 percent
of the NCUA’s managers are women.

The NCUA has additionally built a diverse
supplier network to obtain innovative

solutions and the best value, particularly
in technology and IT solutions.

During 2022, the agency awarded $32.8
million of reportable contract dollars

to minority and women-owned businesses.

That figure represents 45 percent
of the agency’s contracting

dollars, an increase of 8 percentage
points from the prior year.

Credit unions may also assess their DEI
policies and programs through a voluntary

credit union diversity self-assessment
offered annually.11 Credit union

submissions of their self-assessment
have no bearing on their CAMELS rating,

and examiners cannot access the data.

The NCUA reports credit union
diversity data only in the aggregate.

The agency encourages credit unions to use
this tool to support their DEI efforts.

In 2022, 481, or 10 percent of all credit
unions, submitted a self-assessment.

The figure represents an all-time
high for submissions to the NCUA.

Of those submissions, 302 were federally
chartered credit unions, 178 were

federally insured and state-chartered,
and one was a non-federally insured,

state-chartered credit union.

The number of CUDSA responses in
2022 is twice as much as the 240

self-assessments submitted in 2021.

Finally, to support credit
union accomplishments in DEI and

provide further guidance, the NCUA
hosted its fourth DEI Summit in

Washington, D.C., in early November.

This now annual event provided a
forum for hundreds of credit union

stakeholders to network, share best
practices, and meet with thought leaders

on ways to expand their DEI efforts.

The event also highlighted the importance
of allyship in helping to achieve the

NCUA’s and credit unions’ DEI goals
and improve the financial prospects and

futures of families across the country.

Rulemaking Activities

Since May, the NCUA Board has
engaged in several rulemakings on

topics like MDI preservation, member
expulsion, financial innovation, fair

hiring, and charitable donations.

These rulemakings have aimed to
implement laws required by Congress

and strengthen the credit union system.

In May, the NCUA Board approved a
proposed rule that would add “war

veterans’ organizations” to the
definition of a “qualified charity” that

a federal credit union may contribute
to using a charitable donation account.

The NCUA Board approved the proposed
rule noting the attributes of “veterans’

organizations” as defined by section
501(c)(19) of the Internal Revenue Code

are aligned with the purposes of the
current charitable donation account rule.

A “qualified charity” is a section
501(c)(3) entity defined by the Internal

Revenue Code and must be both a non-profit
and be organized for a charitable purpose.

The final rule will be
considered on November 16.

In June, the NCUA Board approved
proposed changes to the interpretive

ruling and policy statement on
the agency’s Minority Depository

Institution Preservation Program.

The proposal would amend an existing
interpretive ruling and policy statement

to update the program’s features, clarify
the requirements for a credit union to

receive and maintain an MDI designation,
and reflect the transfer of the MDI

Preservation Program administration
from the agency’s Office of Minority

and Women Inclusion to its Office of
Credit Union Resources and Expansion.

Proposed amendments to the interpretive
ruling and policy statement also include

incorporating recent program initiatives,
providing examples of technical assistance

an MDI may receive, establishing a
new standard for MDIs to assess their

designation periodically, and updating
how the NCUA will review an MDI’s

designation status, among other changes.

This rule is pending.

Additionally, the Board finalized a rule
in July to implement requirements of the

Credit Union Governance Modernization Act
of 2022.12 This regulation streamlines

procedures for credit unions to expel a
member in cases of serious misconduct.

In September, the NCUA Board approved
a financial innovation final rule that

provides flexibility for federally
insured credit unions to utilize advanced

technologies and opportunities offered
by the financial technology sector.

The final rule specifically provides
credit unions with options to participate

in loans acquired through indirect lending
arrangements and financial technology.

With the adoption of this final
rule, the limits previously found in

the NCUA’s regulations are replaced
with policy, due diligence, and

risk-management requirements that
can be tailored to match each credit

union’s risk levels and activities.

Lastly, the NCUA Board in October
approved a proposed rule that would

incorporate the NCUA’s Second Chance
Interpretive Ruling and Policy Statement,

and statutory prohibitions imposed by
Section 205(d) of the Federal Credit

Union Act into the agency’s regulations.

This proposed rule would allow people
convicted of certain minor offenses to

work in the credit union industry without
applying for the NCUA Board’s approval.

It would also amend requirements
governing the conditions under which

newly chartered or troubled federally
insured credit unions must notify

the NCUA of proposed changes to
their board of directors, committee

members, or senior executive staff.

The comment period closes
on January 8, 2024.

Legislative Requests

While the credit union system continues to
perform well overall, several amendments

to the Federal Credit Union Act would
provide the NCUA with greater flexibility

to effectively regulate the credit union
system and protect the Share Insurance

Fund in light of an evolving economic
environment, a changing marketplace,

and technological advancements.

Central Liquidity Facility Reforms

As noted previously, the NCUA Board
unanimously supports a statutory change

to restore the ability of corporate credit
unions to serve as CLF agents on behalf

of a subset of their member credit unions.

Such legislation would better
allow the CLF to serve as a shock

absorber for liquidity events
within the credit union system.

On February 28, 2023, lawmakers
introduced bipartisan legislation that

would allow corporate credit unions to
purchase CLF capital stock on behalf

of a subset of their members.13 This
legislation would permit corporate

credit unions to contribute capital to
provide coverage for smaller members

with less than $250 million in assets.

Liquidity risks within the credit
union system are rising, and timely

consideration of this bill would
better protect the credit union

system from future liquidity events.

Restoration of Third-Party
Vendor Authority

The risks resulting from the NCUA’s
lack of vendor authority are real,

expanding, and potentially dangerous for
the nation’s financial infrastructure.

Other independent entities, including
the Government Accountability Office, the

Financial Stability Oversight Council,
and the NCUA’s Office of Inspector

General, have identified this deficiency
as inhibiting the NCUA from fulfilling

its mission to safeguard credit union
members and the financial system.

And, it is the NCUA Board’s
continuing policy to seek third-party

vendor authority from Congress.14

The agency is working within its current
authority to address this growing

regulatory blind spot, but it is evident
that additional authority is needed.

There has also been a shift in credit
union leaders’ understanding of the

value of the NCUA having the same vendor
authority as the federal banking agencies.

The benefits include credit union
access to NCUA examination information

when conducting due diligence of
vendors, fewer requests from the NCUA

to credit unions to intervene with
vendors experiencing problems, and fewer

losses to the Share Insurance Fund.

The potential for such resulting losses
to the Share Insurance Fund is real.

The NCUA’s Office of Inspector General
stated that between 2008 and 2015,

nine CUSOs contributed to material
losses to the Share Insurance Fund.

The report noted one of the
CUSOs caused losses in 24 credit

unions, some of which failed.

According to NCUA staff calculations,
at least 73 credit unions incurred

losses between 2007 and 2020 as
losses at CUSOs roll onto credit union

ledgers and lead to liquidations.15

The absence of third-party vendor
examination authority limits the NCUA’s

ability to assess and mitigate potential
risks associated with these vendors.

Vendors typically decline
these requests or refuse to

implement recommended actions.

This limitation exacerbates any exposure
credit unions have to the operational,

cybersecurity, and compliance risks
that can arise from these relationships.

Without the authority to enforce
recommended corrective actions, the

NCUA is unable to effectively protect
credit unions and their members.

Furthermore, the growing reliance on
third-party services in the credit

union industry poses a systemic
risk to the credit union system.

Five core banking processors, for
example, handle more than 90 percent

of the credit union system’s assets.

A failure of one of these critical
third parties could cause hundreds

of credit unions and potentially tens
of millions of their members to lose

access to their funds simultaneously.

Such a vendor failure, in
turn, may result in a loss of

confidence in the financial sector.

Ensuring proper oversight is
imperative, as CUSOs and third-party

vendors are poised to capitalize
on financial institutions’ growing

appetite for artificial intelligence
and real-time payment services.

If granted third-party vendor authority,
the NCUA would implement a risk-based

examination program focusing on services
that relate to safety and soundness,

cybersecurity, Bank Secrecy Act and
Anti-Money Laundering Act compliance,

consumer financial protection, and
areas posing significant financial

risk for the Share Insurance Fund.

Additional Flexibility for
Administering the Share Insurance Fund

The recent turmoil in the banking sector,
growing liquidity risks within the credit

union system, and rising interest rate
risk all highlight the need for the

NCUA to have additional flexibility for
administering the Share Insurance Fund.

Specifically, the NCUA requests amending
the Federal Credit Union Act to remove

the 1.50 percent ceiling for the
Share Insurance Fund’s equity ratio

from the current statutory definition
of “normal operating level,” which

limits the ability of the Board to
establish a higher normal operating

level for the Share Insurance Fund.

A statutory change should also remove the
limitations on assessing Share Insurance

Fund premiums when the equity ratio of
the Share Insurance Fund is greater than

1.30 percent and if the premium charged
exceeds the amount necessary to restore

the equity ratio to 1.30 percent.16

Together, these amendments would bring
the NCUA’s statutory authority over the

Share Insurance Fund more in line with
the FDIC’s authority as it relates to

administering the Deposit Insurance Fund.

These amendments would also better
enable the NCUA Board to proactively

manage the Share Insurance Fund by
building reserves during economic

upturns so that sufficient money is
available during economic downturns.

This more counter-cyclical approach
to managing the Share Insurance Fund

would better ensure that credit unions
will not need to impair their one

percent contributed capital deposit or
pay premiums during times of economic

stress, when they can least afford it.

Conclusion

The NCUA stands ready to address
the impact of the evolving

economic and business cycles
within the credit union system.

The NCUA will continue to monitor credit
union performance and coordinate with

other federal financial institution
regulators, as appropriate, to

ensure the overall resiliency and
stability of our nation’s financial

services system and economy.

Thank you again for the
invitation to testify about the

NCUA’s programs and operations.

That Concludes the words of
NCUA Chairman Todd Harper.

If you enjoyed this type of podcast - and
made it all the way to the end - check

out our related podcast on credit
unions called Credit Unions this Week.

This is Mark Treichel typing and Robot
Ethan talking, thanks for listening,

Happy Holiday's and Merry Christmas.