November 17, 2022

Harper reiterates how NCUA is working to strengthen CUs

Capitol domeNCUA Chairman Todd Harper testified before the House Financial Services Committee Wednesday providing updates on the NCUA’s efforts to maintain the safety and soundness of the credit union industry.

Harper again called on lawmakers to make permanent Central Liquidity Facility (CLF) flexibility to ensure credit unions – especially smaller institutions – have resources to respond to future emergencies. NAFCU had flagged this as a priority to lawmakers ahead of both the House Financial Services Committee and Senate Banking Committee hearings with regulators this week. Harper also expressed his support for increased vendor examination authority for NCUA, a move NAFCU opposes.

In addition, Sens. Alex Padilla, D-Calif., and Kevin Cramer, R-N.D., earlier this week wrote a letter urging legislation to make CLF enhancements permanent be included in the final National Defense Authorization Act (NDAA) set to be passed in the coming weeks.

In opening statements, committee Chairwoman Maxine Waters, D-Calif., noted the importance of promoting diversity, equity, and inclusion (DEI) in the financial services system, including through Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs). DEI is a priority for the NCUA and Harper noted in his testimony efforts to advance DEI and preserve MDIs within the credit union industry.

Harper also addressed the agency’s recent report that found minority borrowers faced higher denial rates or paid higher interest rates than white borrowers. He said the agency is working to enhance its fair lending program and will consider more than Home Mortgage Disclosure Act (HMDA) data in risk-focused exams.

Throughout the hearing, Harper responded to questions related to appraisals, racial wealth disparities, climate financial risk, and protecting consumers amid financial crises. The hearing also covered digital assets, the housing market, and section 1033 implementation.

Of note, now that Republicans have secured a majority in the House after the midterm elections, Ranking Member Patrick McHenry, R-N.C., is expected to chair the committee next Congress. NAFCU’s advocacy team has held several meetings with McHenry on credit union priorities and the congressman spoke at this year’s Congressional Caucus on future issues the committee will likely tackle.

NAFCU will provide more updates on congressional Republican leadership in tomorrow’s NAFCU Today.