NCUA Board Member Todd Harper recently spoke at a Women in Housing and Finance Policy luncheon event. Notably, Harper said the agency is learning from the past but that focusing on the future is essential to meeting a period of significant change with warning signs dotting the landscape.

“We need to be fair and forward-looking; innovative, inclusive, and independent; risk-focused and ready to act; and appropriately engaged with all stakeholders,” Harper told the group. “We need to have foresight for the year 2020, not just 20/20 hindsight. While it’s important to develop new rules and revise old ones based on lessons learned in the last crisis, it’s equally important to look ahead at risks coming over the horizon.”

Harper discussed several emerging risks to financial institutions, including:

• liquidity, which Harper described as essential to surviving times of economic stress, while noting NCUA requires credit unions have appropriate risk-management and access to liquidity in place;
• rising consumer debt, which he noted had reached a record $4 trillion and requires credit unions to carefully evaluate risks when making new loans and hedge risks appropriately; and
• large deficits and a growing national debt, which creates significant uncertainty.

Harper concluded by saying the agency and all credit union system stakeholders have roles to play and responsibilities when it comes to protecting credit union members and the system overall.

“By getting ahead of emerging risks and better protecting consumers, the NCUA will have 2020 foresight and not 20/20 hindsight,” he said. “I invite anyone interested in consumer financial protection to reach out to me and share their concerns and solutions. In doing so, we can build a stronger credit union system to better serve everyone in the future.”