NCUA chief unveils plan to tackle 'the civil rights issue of our time'

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The National Credit Union Administration is expanding the work it does to focus on financial inclusion efforts, a key priority for NCUA Chairman Rodney Hood.

In remarks Monday at the Hope Global Forum, Hood announced the launch of ACCESS, a new initiative from the agency focused on broadening the work NCUA and the wider industry do to bring consumers into the financial mainstream.

NCUA Chairman Rodney Hood, pictured here testifying virtually before the Senate Banking Committee earlier this year.
NCUA Chairman Rodney Hood, pictured here testifying virtually before the Senate Banking Committee earlier this year.

In an exclusive interview with Credit Union Journal announcing the program, Hood said that while helping vulnerable and marginalized communities has been a focus throughout his financial services career, the death of George Floyd and subsequent social-justice protests exacerbated the need for affordable financial services to help bring more consumers into the fold.

“Financial inclusion is the civil rights issue of our time,” Hood said, echoing a phrase he frequently uses on this topic. “We are now seeing that play out disproportionately in communities of color throughout the United States.” While about 40% of Americans were unable to come up with $400 for an emergency before the COVID-19 pandemic hit, Hood said, that figure was 60% for communities of color.

The program’s name, ACCESS, is an acronym for Advancing Communities through Credit, Education, Stability and Support, and Hood emphasized that each component of the name ties in with much of what the credit union industry already does, including providing affordable products, financial literacy and financial coaching, lifting up minority depository institutions and more.

Under Hood’s chairmanship, NCUA has already tackled several matters related to financial inclusion, including a new rule on payday alternative loans and a second-chance initiative that would make it easier for those with low-level criminal convictions to gain employment in the industry. ACCESS aims to go beyond that by incorporating new partnerships both inside and outside of the industry, and ensuring that the program is spread across the entirety of NCUA and not just in its Credit Union Resources and Expansion division.

“Typically CURE are the ones that work solely with MDIs … but since ACCESS is bigger than one department, it will have cross-departmental representation, working with our examiners, working with economists [and] working with our general counsel to reduce regulatory burdens for these institutions,” he said.

Hood added that ACCESS is also intended to be a program that can outlive his chairmanship. While Hood’s term at the agency won’t expire until 2023, board member Todd Harper, the panel’s only Democrat, could be elevated to the chairmanship if former Vice President Joe Biden wins the presidency.

Some of what ACCESS produces will be guidance for credit unions, such as advice on fintech partnerships and how to look at alternative credit scoring as part of financial coaching, but Hood did not rule out the possibility of new rulemaking.

“If guidance will suffice now, it may mean we just need to tighten guidance and give folks parameters,” he said. “Everything is on the table when it comes to advancing financial inclusion and shared prosperity, so rulemaking is just one of the many options that exist.”

It’s not yet clear how the program will impact NCUA’s budget, and Hood did not rule out the possibility of bringing on additional employees, though he said some of the work could also be accomplished by expanding existing staff members’ responsibilities and partnering with agencies such as Inclusiv and Operation Hope.

NCUA plans to measure the program’s success through a variety of hard metrics and qualitative data, said Hood, including tracking usage of payday alternative loans — both the agency’s own product and those designed by individual credit unions — along with hiring done through the second-chance initiative. Other factors, such as the percentage of households with emergency funds available, may also be used.

Hood tied the need for ACCESS back to the broader racial and social justice conversation that has dominated 2020.

“Now is the time to harness that national discourse around inclusion,” he said. “We’ve seen disproportionately what’s happened with marginalized communities and I recognized the time was appropriate for us to harness the energy we’re seeing and use this opportunity to say ‘Enough already, let’s make sure folks now the resources are there.’ ”

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Financial inclusion NCUA Credit unions Financial wellness Financial literacy