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WASHINGTON-Communication, tied to action, is the way to maintain a strong credit union system, NCUA Vice Chairman Rodney Hood said. Hood stated, “Communication requires more than just listening. It requires action.” He said that he and the agency had to be willing to adapt to credit unions’ needs to fulfill their mission. One formal venue for the listening process is a summit the vice chairman plans to call this year for credit unions and their corporates to meet and discuss “the most current and sophisticated tools to mitigate balance sheet risks and explore alternative investment opportunities for credit unions of all asset levels, whether it is a $10 million institution or a billion dollar credit union,” Hood said. “We must renew a focus on sustaining all these institutions in the credit union system while facilitating opportunities to mitigate risks and create strategic partnerships for the continued growth and expansion of “all” not-for-profit financial cooperatives.” While the agency feels the need to take action on documenting federal credit union service to members of modest means, it is also important to listen to the burdens the institutions have to deal with in connection to this documentation. “The pilot initiative will allow the NCUA to obtain quantifiable data while not placing burdens on the credit unions,” Hood said. “Make no mistake: This agency is not seeking and will not seek CRA-like requirements from credit unions.” He speaks from experience having served as a CRA officer at a large bank at one time. “I say that with conviction because I’ve been there,” he emphasized. However, to supplement this effort, credit unions need to spread the word about the work that they do while they are visiting Capitol Hill during CUNA’s GAC. Credit unions’ federal corporate income tax-exemption is at stake, he stressed. “Credit unions across America should tell their story with more vigor and determination in order to defeat criticism of the bankers and insure the long-term security of the credit union system,” Hood said. “From my perspective as a regulator, maintaining credit unions’ tax-exemption is critical to protecting safety and soundness. If credit unions are taxed, the taxes will cut into retained earnings. Even today’s most viable credit unions could face Prompt Corrective Action under that scenario. As lawmakers weigh credit unions’ tax-exemption against the perceived greater public good, they must hear your clarion voice that credit unions are providing their constituents with credit and capital they need to buy cars, purchase homes, start small businesses, send children to college, and save for the future – essential financial services to which people of modest means would never have access without credit unions.” Hood vowed to continue to seek out innovative ways for credit unions to serve their members’ evolving needs. And, rather than the bank’s continuous barrage against credit unions, he said, “I believe all financial institutions should be working together to serve the underserved and the unbanked.” -

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