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Vice Chairman Hood Underscores the Need for Effective Enterprise Risk Management in the Current Economic Climate

February 4, 2008, Alexandria, Va. – National Credit Union Administration (NCUA) Vice Chairman Rodney E. Hood addressed the National Association of Federal Credit Unions’ (NAFCU) Mid-Sized CEO Roundtable in Williamsburg, Va. The Vice Chairman used this forum to discuss the current financial state of the industry as the Agency prepares to release the industry’s 2007 year-end data. 

Vice Chairman Hood provided detailed slides, specific to the group, comparing them to national averages for all federally insured credit unions, and he discussed the trends and points of concern that the Agency is tracking. 

Hood described how the best practices of risk management can be used to mitigate the effects of a downturn in the economy. He presented the roundtable with seven areas of risk and their associated issues, based on the present state of our economy. 

“Now more than ever, you as credit union leaders, along with your boards, must focus on doing due diligence. You can’t outsource it or rely on an outside party,” Vice Chairman Hood said.

Optimistic about the role credit unions can play in spurring economic growth, Mr. Hood encouraged them to continue providing innovative and sound member business lending products while helping their members mitigate risks through balance sheet diversification. This helps member-owners establish viable businesses that create jobs and sustain local communities. 

“Credit unions make a strong positive impact on their surrounding communities, and constant advancement does not happen without strong leadership, vision, and commitment,” Hood said. “In order to evolve, credit union’s enterprise risk management (ERM) programs must keep pace with the ever-changing market. Additionally, credit union management must be properly trained to effectively analyze and implement ERM programs.”

The Vice Chairman closed by stating his priority as a regulator is to create policies with predictability, transparency, and longevity that are conducive to capital formation and economic empowerment while fulfilling the vital role of protecting the consumer.

“I am dedicated to listening carefully and working hard to ensure the safety and soundness of the credit union system. In this time of economic turmoil, I know we can work together to continue helping families achieve the American dream of homeownership – that we can assist entrepreneurs in creating small, viable business, and we can provide the trusted resources for families to save for their futures,” Vice Chairman Hood said.

The National Credit Union Administration is the independent federal agency that regulates, charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, also operates and manages the National Credit Union Share Insurance Fund (NCUSIF) insuring the deposits of over 86 million account holders in all federal credit unions and the majority of state-chartered credit unions.