NCUA wants credit unions to get friendlier with fintechs

As credit unions focus more attention on digital assets and financial technology, leaders at the National Credit Union Administration are working to improve existing initiatives, as well as establish new ones, to provide education on the subjects.

At the 2021 National Association of Federally-Insured Credit Unions congressional caucus, former chairman and current NCUA board member Rodney Hood spoke on these issues and how his agency is working to help credit unions face them.

Part of that effort will be the creation of an Office of Innovation and Access to enable the NCUA to better understand how fintech firms operate and to help draft effective regulations. The office will help the NCUA collaborate with fintechs and guide them through regulatory requirements.

“If we deploy technology creatively and strategically, we’re going to be able to really help move the needle when it comes to underserved communities,” said Hood, who currently meets with firms as often as every week to learn about the services they can offer to the credit union industry. Hood spoke during a fireside talk at the NAFCU event.

“We are not experts when it comes to a lot of these technologies, and I don’t want to pretend to be the subject matter expert,” said Rodney Hood, member of the National Credit Union Administration’s board.

The NCUA will also invite fintechs to help improve the way examiners vet those companies. “I’m bullish about fintech, and I want to see more opportunities,” Hood said.

The agency has also put out requests for information to assist with providing guidance to credit unions, without impeding their business decisions.

“We are not experts when it comes to a lot of these technologies, and I don’t want to pretend to be the subject matter expert,” Hood said. “But there are some of you who are, and we want to hear from you about topics like policy implications and other things that you are seeing. I don’t want to make decisions without hearing from experts such as you.”

The NCUA is one of the few regulatory agencies without an advisory group for fintech, according to Hood. Compounded with the feedback that the agency receives from the active RFIs, Hood looks to establish a forum to foster dialogues between the NCUA credit unions and subject-matter experts in order to gain valuable insight to use in the decision making process.

Hood also addressed developments in the NCUA’s ACCESS initiative, which was founded in response to the death of George Floyd. Through ACCESS, which stands for Advancing Communities through Credit, Education, Stability and Support, the NCUA works to provide opportunities and financing to underserved communities to bring them into the economic mainstream.

The agency is looking to hire a coordinator to handle work with minority depositories, community development financial institutions and low-income credit unions.

“A question we think about is ‘what are the tools they need to better serve low-income communities’ and ACCESS is going to address that,” Hood said. Through a second component of the initiative, the NCUA will work to foster procurement opportunities with diverse entrepreneurs to further the core principles of the initiative. “If I talk about helping minority entrepreneurs, or any entrepreneurs for that matter, we need to make sure that we are buying their goods and services.”

In tandem with ACCESS, the NCUA is working to establish a pipeline of diverse recruits that resemble the communities these institutions serve. Doing so involves collaborating with historically Black colleges and universities and minority colleges to locate and cultivate young talent for the future.

“I know that we have a number of retirements on the horizon, so what are we doing to make sure that there will be a deep enough bench to have talent that can really help propel our industry for the next century?” Hood said. “I’m hoping that the ACCESS initiative will be part of our DNA for many generations to come.”

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