Though he was armed with a wealth of experience in banking and financial inclusion,
After graduating college in 1989, Hood took up a position in General Electric Capital's Financial Management Program that served as his foray into the world of finance.
He spent two years there before moving to North Carolina National Bank in 1991, where he progressed through the bank's relationship management development program into a commercial loan officer role. Hood changed titles soon after and became a Community Reinvestment Act manager for NationsBank, which was established by the merger of NCNB and C&S/Sovran around the same time and eventually became Bank of America.
After four years of working with small businesses to provide access to the capital they needed to grow, Hood left that position and spent seven years as a national director in Wells Fargo's community development lending division helping launch affordable housing projects while working with Habitat for Humanity and NeighborWorks America on educational resources.
The role that opened the door to the NCUA, however, was his appointment as the associate administrator of the Rural Housing Service at the U.S. Department of Agriculture by former U.S. President George W. Bush. He was later appointed as chairman of the agency in 2019 by former U.S. President Donald Trump.
"The White House had heard that I was doing a great job, loan volume was up for both multifamily and single family housing and the guarantee programs were really reaching their intended audience. … I was asked if I would be willing to go to the NCUA, and of course my first question was, 'sure, but can you tell me what the NCUA is first?'" Hood said.
In an interview with American Banker, Hood recounted his accomplishments during his time on the NCUA board, which include launching the
What made you jump into the credit union industry after working for large institutions like Wells Fargo and Bank of America?
RODNEY HOOD: I actually didn't choose credit unions. They chose me in a way, because my entry point into the credit union system was as a political appointee.
I'd been in banking a little beyond a decade at that point, but had never really encountered the prudential regulator for credit unions. [Someone at] the White House's Presidential Personnel Office sat me down and told me that the NCUA is the regulator and insurer for the credit union system, while explaining that because of my commercial lending background, my understanding of credit access and liquidity and all those issues, they thought I would have the main core competencies in becoming a regulator.
The next thing you know, I'm at the NCUA where I became the vice chairman. It was in that time frame that I really enjoyed getting to know the credit unions, and I was able to leverage some of the things that I learned in banking and finance to play a key role in introducing enterprise risk management to credit unions.
After your appointment to the board by then U.S. President George W. Bush, how did you prepare for your new role? What resources did you consume to learn about the industry?
I talked with some of the former board members of the NCUA once I was confirmed by the Senate, then spent a lot of time working with folks from different think tanks such as the American Enterprise Institute. I tend to be someone who has a voracious appetite for reading and learning.
I also spoke with some of the career officials at my agency, learning from them about what are some of the challenges, what are some of the best practices, what are some of the things that are going well and where is there room for improvement? I certainly enjoyed learning about the nuances on what separated banks from credit unions, and I think that's what allowed me to be a really effective regulator once I understood those subtleties.
I would say I now know the nuances and what differentiates credit unions from banks, but it's still a learning journey and it's still one that I look forward to even now as I retire.
During your tenure as chairman of the NCUA, and the first person of color to hold the position, what were some of your priorities?
When I joined the NCUA board again, I was building out my team and I said "we need to be very mindful that this term, it's going to come and go very quickly" and I needed to begin with the end in mind.
I was very proud of the fact that we were able to create the ACCESS Initiative, which came about following the killing of George Floyd. I could see that a lot of that anger was stemming from the disproportionate impact that the pandemic had had on minority and underserved communities and a lot of folks, I think, had no hope.
Thinking that hope could be really instilled through financial tools and resources, I worked with my colleagues at the NCUA to launch the group, which is an arm within the NCUA to help credit unions look at financial inclusion through training, looking at small-dollar loan products and a whole number of things that really can help. When we talk about ACCESS, it almost seems like it's a platitude, but no. For us, it is a strategic imperative and I'm delighted that it's there.
Financial technology was another priority of mine, and it was during my time on Wall Street that I saw the fintechs were really taking a lot of products to banks that were using those tools to serve their customers or their clients. In 2019, I did not hear a lot of discussion about credit unions and fintechs. I recognized that if they were not going to be a part of those technological advancements, then perhaps they would not be able to compete in today's dynamic marketplace.
My job was as a safety and soundness regulator, not to make them competitive, but to make them strong and sustainable. So I became a supporter of financial technology and spearheaded the creation of the NCUA's Office of Innovation and Access with the help of my fellow board members.
The NCUA brings fintech firms in almost every other week to do training sessions with the agency on how they're serving the credit union community. During those sessions, we have them talk about how they are complying with safety and soundness guidelines and all the regulatory requirements that we want to have them comply with from the consumer protection lens.
My ecclesiastical pursuits, my faith and the scriptures reminding me daily that we need to help those most in need, when applied throughout my more than 30 years in finance, have helped guide me in that mission.
From the time that office was created, until a director was appointed in early 2023, you were basically the
Around the time I became the chairman of the NCUA, I was excited to explore working with fintechs but felt that many at the agency were reluctant to readily embrace fintech because of potential risks. While I'd already gotten the approval from my fellow board members to recruit for the position, it took a long time to find that right person and in the interim, I knew I needed to step in.
When I talked about intentionality, you've heard me talk about financial inclusion and access. I grouped the Office of Financial Technology and ACCESS together, and the intentionality behind that is, I did not want us to innovate just because that's what all the cool people are doing in Silicon Valley. I wanted us to use innovation as a catalyst for driving financial access.
Not all the fintechs that the NCUA is working with are focused solely on financial inclusion, I want to make that clear. Some of them are doing faster payments, some provide tools for data analytics and data aggregates to help credit unions go deeper with members. The NCUA is going to look at a lot of other use cases across the fintech ecosystem, but the primary thing is looking at technology to spur greater inclusion in the mainstream economy.
The reason I talk about this issue so much in a lot of my speeches, is because I want people to know that it's alright to put your toe in the water. It is alright to hear from that regulator, because people are always looking at what the regulator is telling us we can and cannot do. So I wanted to let them know that I was forward thinking and encouraging them to look at these tools. Risk avoidance is not a viable strategy.
You've developed a well-known motto that "regulation should be effective, but not excessive." How did you make sure to abide by that?
Whenever staff wanted to write a new rule, I would always ask what impact it's going to have on our small credit unions. Is there another vehicle that we can use to perhaps have the same level of information without it resulting in a rulemaking? It was always looking at what the impact would be in a cost benefit analysis.
One of the things that I wanted to do was reduce regulatory burden, and an example of that was our
As such, I saw no compelling reason as to why credit unions should be different.
Across your career, there's always been an element of strengthening underserved communities, be it as a corporate responsibility manager for JPMorgan Chase, as a member on the board of directors of NeighborWorks America and so on. Talk about that core value.
I spent time as a short-term missionary many years ago, while I was in Zambia and Zimbabwe. I had considered becoming an Episcopalian priest, I thought that I was going to leave the missionary field and like in the movies, have this experience where I was jostled out from my bed by lightning and be in a pulpit a few days later.
As you might've guessed, the priesthood wasn't for me. In speaking with one of my ministers, he said to me "one needn't wear the clerical collar to help the least amongst us," and that really stuck with me.
I've been so fortunate to work with some of the most venerable companies in financial services, JPMorgan Chase, Bank of America and Wells Fargo. The roles that I've had with them allowed me to touch areas like affordable housing and economic development, so I was able to live out my purpose and my mission by helping these communities in need.
My ecclesiastical pursuits, my faith and the scriptures reminding me daily that we need to help those most in need, when applied throughout my more than 30 years in finance, have helped guide me in that mission.
After
I'm delighted that I had an opportunity to meet her in person for the first time last week, first and foremost. The main thing that the industry should expect is for NCUA to continue to be that prudential regulator and insurer, while keeping their eye on safety and soundness.
Looking back on your years with the NCUA, is there anything that you regret?
I tend not to try to approach anything with regret, retreat or reservation. But if there was one thing I had to pick, it would be talking about financial inclusion on a more holistic level.
I've always said that financial inclusion is the civil rights issue of our time, and explored the topic in terms of getting you that checking account, that savings account and that full credit card, but I wished I had looked at the topic on a broader scale.
What about equities? What about the stock market? What about encouraging individuals to learn more about their 401(k)s? I wish I talked about full, holistic financial inclusion and gone deeper than just leading folks to believe that their financial inclusion efforts are just to get you into a checking account or a savings account.
What's next for Rodney Hood?
I'm going to rest a bit and ponder what that next chapter looks like. But it's safe to say that a lot of people who are approaching me are all in the financial services arena, so don't be surprised if you hear me working or being engaged with some fintechs that are engaged with financial inclusion.
