PORTLAND, Ore. – In a speech before attendees of CU Business Group’s 2019 National Business Services Conference Tuesday, NCUA Board Member Todd Harper admitted NCUA examiners were not as “ready to act” as they should have been during the period leading up to the taxi medallion lending crisis.
“What concerned me about the taxi crisis was that the NCUA went in and said there were problems at the taxi credit unions, and wrote them up as Documents of Resolution,” Harper said.
He said those DORs were kept on file over the course of multiple exams, and were never escalated out in the field. Now, the credit union system will have to absorb approximately $1 billion in losses as a result of the taxi crisis, he emphasized.
“We are partially at fault for that,” he said. “We should have been ready to act sooner.”
Harper explained the importance of being “ready to act” while detailing the elements of his leadership philosophy at the NCUA, which he referred to as FIRE: Fair and forward-looking; innovative, inclusive and independent; risk-focused and ready to act; and engaged to develop efficient regulation.
As part of the “fair” element, he shared his belief that the NCUA cannot show favoritism when making regulatory decisions. “Congress didn’t create us to be partisan in our actions,” he said.
He also emphasized the importance of embracing diversity. “We’re becoming a much more diverse society, and if credit unions want to continue to grow, they need to be more inclusive in their membership, and in terms of who they hire and how they hire, and the NCUA needs to be more inclusive in what we do.”
Harper briefly discussed cybersecurity, stating it is a top concern of his and that the NCUA’s efforts with its Cybersecurity Examination Tool is helping to alleviate some of those concerns, and the importance of credit unions’ ability to diversify their lending portfolios despite the Member Business Lending cap. He explained that making it easy for low-income designated credit unions to be named, some of which are exempt from the cap, is one key to enabling more freedom in business lending.