NCUA Vice Chairman Kyle S. Hauptman during a meeting of the NCUA Board.
As Prepared for Delivery on June 22, 2023
Thank you, Martha, and team, for this presentation. The de novo chartering process has been a priority of mine since my first Board Meeting in 2020. I even mentioned it six months before that, in my Senate confirmation hearing. I know Chairman Harper and Board Member Hood share this commitment. As one of the original solutions for financial inclusion, the formation of a new credit union is the ultimate demonstration of this agency’s dedication to diversity, equity, and inclusion. I am fond of the saying that “what gets measured, gets done.” Today’s report is a measurement of progress. And, as the first report of its kind, it also provides a baseline for future reports.
There’s no question there has been improvements in the last two years. Dividing the chartering process into three distinct phases provides some clarity, especially for the lead organizer who must report to other people on “Where are we with that charter?”
We’ve put the chartering manual online, which has provided much-needed clarity. But our work is not yet done. We’re working on the process here, but the measurement of success will always be new, stable charters.
As you know, getting to a completed charter application can take years. I believe we must measure the time it takes from initial application to completed application to find out where organizing groups are having difficulty. Although chartering a new credit union is very different than the merger of a credit union, both processes are (rightfully) complicated. Somehow, the agency has managed to streamline the difficult merger process. From the outside looking in, it appears the NCUA is more supportive of merging credit unions than supporting the groups that want to form them. If chartering new credit unions is important, our processes should reflect that. Going forward, we can look at easy-to-fill out templates, examples of prior successful charter applications — the sort of things that franchise companies provide to people interested in opening a new Shake Shack, Panera Bread, etc.
More good news — the new provisional charter responds to the chicken and egg challenge of getting capital. That is, a proposed credit union needs capital to get a charter, but the folks who potentially could provide that capital, will not, until the charter exists.
Our new internal management system is a welcome tool in the whole chartering process. I’d like to congratulate Nicolette Alcorta and the CURE team that developed this dashboard. This tool gives the Board and CURE team visibility into the process, while at the same time measuring progress. It also can show us where the potential friction points are so that we can clarify those issues with additional resources, templates, and training.