NCUA Chairman Todd M. Harper Remarks at Inclusiv’s 2021 (Virtual) Conference

As Prepared for Delivery on September 22, 2021

Hello, everyone! It is good to join you!

When I became Chairman earlier this year, I said the NCUA must work to advance economic equity and justice. One way we are achieving that goal is through our support of minority depository institutions, or MDIs, which play an essential role in providing safe and affordable financial services to underserved communities, many of which were especially hard hit by the COVID-19 pandemic.

This is vital work, and I am fully committed to supporting MDIs, by providing them with needed resources like training, grants, loans, technical assistance, and mentoring opportunities. 

We are increasing the NCUA staff devoted to supporting MDIs, and through the Community Development Revolving Loan Fund, we continue to fund MDI mentoring partnerships. These mentoring grants help bring MDI credit unions facing challenges together with more experienced credit unions that can provide guidance and technical assistance.

And, as part of this year’s Revolving Loan Fund grant round, the NCUA allocated more than $1 million to low-income designated credit unions for underserved outreach. Through our underserved outreach grants, we are supporting efforts by credit unions to help close the wealth gap in their communities. These grants are facilitating outreach activities to bring affordable financial services to more people, and supporting products and services tailored to help underserved households improve their financial security. We announced the awardees earlier this month.

Community Development Revolving Loan Fund grants may often be small in size, but they can make a big difference for small, low-income, and minority credit unions that are working to provide more and better services to their members and communities. That is why I encourage all eligible credit unions to consider applying for these grants in the future.

Also important is the participation of MDI credit unions in the NCUA’s upcoming MDI Preservation Roundtables. These online forums will take place in the Southern Region on September 28 and in the Western Region on September 30. These virtual feedback sessions will provide the NCUA with needed information on the challenges facing MDIs and how we can improve our MDI preservation program.

Appraisal Bias

When speaking to groups within the credit union system, I often note that there are three ways to close the wealth gap. One way is to open and fund a retirement account, another way is to start a small business, and the third is to purchase a home.

We know, however, that many people of color have been denied equal access to our housing system. The result of this systemic and institutionalized discrimination is the creation of one of the widest wealth gaps between the races in the history of our country. To close that gap and advance economic equity and justice, we need to take a hard look at the barriers to homeownership that people of color face.

One way to close that gap is to examine the issue of appraisal bias. More than a decade ago in the Dodd-Frank Act, Congress enacted reforms aimed at addressing problems in the appraisal industry, and many consumer organizations and civil rights advocates supported those reforms. Among other things, Congress strengthened the powers of the Federal Financial Institutions Examination Council’s Appraisal Subcommittee, which supervises state regulatory programs. Those reforms also sought to address appraisal independence, fairness and accuracy.

Today, however, we continue to see stresses in the appraisal system, including bias based on race, and I am deeply concerned. You, too, may also have read news stories and investigations about this problem. Existing statutes like the Fair Housing Act, the Equal Credit Opportunity Act, and Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act aim to address this problem, and we should use these laws to regulate, supervise, and enforce against appraisal bias.

At the NCUA, we are studying the causes of disparities in appraisal and valuation services to inform our future policymaking. We are also working with several other agencies on joint rules to establish quality control standards for automated valuation models. And, within the Federal Financial Institutions Examination Council, we are continuing conversations on what more we can do to ensure greater equity within our financial system.

Closing

In closing, by enhancing support for MDIs, enforcing fair lending laws, addressing disparities in the appraisal system, and advancing initiatives to close the wealth gap, we can address the inequalities created by centuries of systemic discrimination and exacerbated by the ongoing pandemic. We can also ensure the credit union system lives up to its mission of meeting the credit and savings needs of consumers, including those of modest means. The result will be a more vibrant economic outcome for everyone, and a stronger democracy.

I know that these issues are at the heart of what Inclusiv and its members seek to achieve each day. Please stay focused on that work.

Thank you and have a great conference!