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This podcast provides you the ability to listen to new regulatory guidance issued by the National Credit Union Administration, and occasionally the F D I C, the O C C, the F F I E C, or the C F P B. We will focus on new and material agency guidance, and historically important and still active guidance from past years that NCUA cites in examinations or conversations. This podcast is educational only and is not legal advice. We are sponsored by Credit Union Exam Solutions Incorporated. We also have another podcast called With Flying Colors where we provide tips for achieving success with the N C U A examination process and discuss hot topics that impact your credit union.
Samantha: Hello, this is Samantha Shares.
This episode covers NCUA
Vice Chairman Kyle S.
Hauptman delivers remarks at the 2024 ACU
Congressional Caucus in Washington, D.C.
The following is an audio version of
that advisory and the press release.
This podcast is educational
and is not legal advice.
We are sponsored by Credit Union
Exam Solutions Incorporated, whose
team has over two hundred and
Forty years of National Credit
Union Administration experience.
We assist our clients with N C
U A so they save time and money.
If you are worried about a recent,
upcoming or in process N C U A
examination, reach out to learn how they
can assist at Mark Treichel DOT COM.
Also check out our other podcast called
With Flying Colors where we provide tips
on how to achieve success with N C U A.
And now the remarks.
NCUA Vice Chairman Kyle S.
Hauptman delivers remarks at the 2024 ACU
Congressional Caucus in Washington, D.C.
As Prepared for Delivery
on September 9, 2024
Good morning and thank you.
This conference is one of my favorites.
One reason Iâm here is to get ideas
on how I should focus the remaining
days I have left in this job.
Around this time next year,
the White House will likely
announce a new Board Member.
Thatâs because my term on the
NCUA Board ends next August, so
I have less than a year left.
Whew, I was worried that
would be an applause line.
Thatâs part of my message today:
that what ACU does matters,
that your advocacy matters.
Hereâs an example of a small, yet
useful improvement that was entirely
because of people in this hotel today;
weâre revising our records retention
policies, so you donât feel compelled
to keep records from decades ago.
It all started with a call I had with
CUNAâs Small Credit Union Committee.
They mentioned credit unions that
had boxes from 40 years ago because
they were concerned the NCUA might
someday ask for something from back
then, all because the NCUA had never
put any kind of limit on how many
years of information we can require.
I saw photos of storage units, piled
high with clearly ancient papers,
printed on that old dot-matrix paper.
Remember those with the perforated
sides with little holes?
I had to look it up, thatâs
called âcontinuous feedâ paper.
So, in April we put out an
Advanced Notice of Proposed
Rulemaking, and help is on the way.
Again, all because I was in a
meeting with folks like you.
Iâm very aware that the only people
who think compliance is easy are
those that donât have to do it.
Other agencies normally do have a limit on
records retention, like the SEC requires
records from the last seven years.
The IRS only audits tax
returns in the past three years
after the return is filed.
So, the upshot here is that youâre
off the hook on your 2019 taxes.
But seriously, your advocacy created real
tangible results, thatâs the message.
Those storage units of old records may
have continued being piled full of boxes
for years to come, but instead someone
brought the situation to our attention.
It wasnât controversial
either, all three Board Members
immediately agreed on what to do.
We just needed someone like
you to send a photo, to tell
us what is actually happening.
And in America, you deserve protection
from an overbearing government.
The same reason thereâs a statute
of limitations for being prosecuted.
So, if we at the NCUA find ourselves
wanting records from 1994 thatâs
our problem, not yours, because
government should have to face
deadlines and accountability as well.
And speaking of protecting us from
government: regarding what are labeled
as junk fees, Iâve never seen a
credit card late fee or an overdraft
fee that comes anywhere close to
what governments themselves charge.
Now, I want to address an issue
that has been a topic of much
discussion recently: the potential
impact of limiting non-sufficient
funds (NSF) and overdraft fees.
I was, and am, opposed to the NCUAâs
new policy of forcing credit unions
larger than $1 billion to publicly
state their revenue from those sources.
If NCUA or other agencies âget over
their skisâ and interfere in the
private financial affairs of credit
unions and their members, the resulting
credit union use of NSF and overdraft
services could have the paradoxical
effect of limiting access to financial
services for those who need it most.
Most importantly, Americaâs more
than140 million credit union members
know their lives better than we do.
And removing overdraft often
results in the consumer paying much
higher fees and treated much worse.
The ultimate irony here
is that governments always
charge the highest fees.
Governments often have coercive powers
far beyond any financial institution.
Late child support payments mean
no shared custody of children.
Cars with a boot because of late parking
tickets come with late fees that exceed
any bank or credit union in this country.
People have had my experience, of trying
to get to work and their car is either
towed because of late registration
fees or booted due to unpaid tickets.
Some of those people thus committed parole
violations because they were late to work.
This stuff is often
avoided via overdraft fees.
Paying a $30 overdraft fee is better than
the $1,200 fee for filing taxes late.
For many credit union members, overdraft
protection and the ability to occasionally
rely on NSF services are not just
conveniences â they are essential tools
that help them manage their finances.
Eliminating these options could
drive some members away from credit
unions and towards less regulated,
higher-cost financial service providers.
In essence, by restricting these services,
we may inadvertently push consumers into
riskier and more expensive financial
arrangements, reducing financial
inclusion rather than enhancing it.
It's crucial that we strike a balance.
Our regulatory framework should protect
consumers from predatory practices
without depriving them of the financial
tools they need to navigate their lives.
You can tell itâs an issue Iâm passionate
about, and I appreciate your attention.
But the consequences of well-intentioned
government are too painful to ignore.
And the victims of overbearing government
are rarely the elites, but rather
the âpeople of modest meansâ that
credit unions are supposed to serve.
There is a well-intentioned movement aimed
at protecting consumers from excessive
fees, which is something we all support.
Iâve paid those fees myself.
Itâs not fun.
However, we must also consider
the unintended consequences
of such regulations.
I think we all get the point here:
paying fees isnât fun, but for millions
of people itâs the better option.
Make no mistake: I personally
donât want to pay nor charge
anyone overdraft or NSF fees.
And there are ways to reduce the number
of situations that result in those fees.
Faster, real-time 24/7 payments
would help a lot; this exists all
over the world but not in the U.S.
Financial literacy and savings
programs can also help reduce
the sting of overdraft fees.
Iâm not on the side of anyone
charging stiff overdraft fees.
Iâm saying we need to be aware
of what happens when NCUA or CFPB
interferes in peopleâs private lives.
We know there are beneficiaries of
these misguided policies; the policies
wouldnât exist if no one benefited.
But who benefits from government
attempts at price controls?
And finally, before we get to Q&A,
I want to mention two fascinating
new technologies that we often hear
about: Artificial intelligence,
and blockchain and digital assets,
which includes cryptocurrency.
Iâve made clear that the NCUA
shouldnât be a technophobic agency.
We at the NCUA are already exploring
ways to use AI for fraud detection,
discussion boards for examiners, and
ultimately an external-facing customer
service chat for credit unions.
We already use AI to scan Call Reports.
As for digital assets, stablecoins
are already changing Americaâs
creaky payments system, especially
for international payments, as well
as providing loan opportunities
with the easiest-to-foreclose-on
collateral you can imagine.
My main point here is that credit unions
have always evolved with new technology;
they were early users of ATMs and
then the internet and mobile banking.
Itâs important that we at the NCUA
understand that innovation is necessary.
I had a reporter ask me, âArenât you
nervous about being pro-AI and pro-crypto,
and do you worry about the problems
they may cause?â I replied, âDo I worry
there might be problems, be downsides?
I know there will be.â
Every new, widespread
technology comes with downsides.
Did you know that there zero
car crashes before we had cars?
Yet, none of us arrived here on a horse.
For that matter, Iâve been asked
about cryptoâs reputation in some
circles as being used by criminals.
Well, if you think crypto is often used
for illicit purposes, youâre going to
freak out when you hear about cash.
That is to say, my true north is making
sure credit unions donât go the way
of Blockbuster video because their
regulator wouldnât let them compete.
Thank you for having me.
This concludes NCUA Vice Chairman Kyle S.
Hauptman delivers remarks at the 2024 ACU
Congressional Caucus in Washington, D.C.
If your Credit union could use assistance
with your exam, reach out to Mark Treichel
on LinkedIn, or at mark Treichel dot com.
This is Samantha Shares and
we Thank you for listening.