Markets Wired

Chairman’s Call to Action: “These Principles Should be Sources of Enrichment, Strength, and Unity”

ALEXANDRIA, Va. (Nov. 6, 2019) – Credit unions can be proud of their achievements in promoting financial inclusion while committing themselves to greater efforts, National Credit Union Administration Chairman Rodney E. Hood said today.

“When credit union people talk about diversity, inclusion, and equity, it’s with an understanding that those values are part of this industry’s genetic code,” Chairman Hood said. “We should take pride in our achievements at elevating the commitment to diversity and inclusion, but there is still a tremendous amount of work that needs to be done. Diversity, equity, and inclusion should be sources of enrichment, strength, and unity, not division.”

Chairman Hood spoke to the NCUA’s first annual Diversity, Equity, and Inclusion Summit conference. The text of his remarks is available online.

A Commitment Built on Personal Experience

Chairman Hood spoke of a commitment to greater diversity, equity, and inclusion in concrete and aspirational terms, and he said his views where shaped by his own background.

“I’m proud to be the first African-American head of a federal financial regulatory agency, but getting there was not easy,” he said. “I’ve worked in the financial services industry long enough to know how challenging it can be for members of under-represented communities.

“In my banking career, I’ve attended conferences and professional events where I was the only man of color in the room,” Hood said. “I have shown up early to speak on a panel discussion, and people were surprised to learn I was a participant.”

There is another side to this, as well, Hood said: lesser expectations.

“Many of us have seen the other side,” he said, “working for a manager who expects less of you because of your skin color, ethnic background, or gender. It doesn’t necessarily stem from hostility; they may even think they’re trying to help you. But they don’t realize they would be helping you more by challenging you to work up to your potential and to achieve more.”

A Broader Understanding of ‘Dividing Lines’

While reaching out to traditionally underserved communities, Chairman Hood said, a commitment to diversity and inclusion must consider the other dividing lines in society.

“Age is one of those,” he said. “Accessibility is a dividing line. Increasingly, where you live is one of the dividing lines. Especially over the last decade, the withdrawal of financial services providers from rural America poses a serious threat to access for people who live there.”

Credit unions, Chairman Hood said, can be a particularly powerful tool for meeting the needs of people who cannot get access to the financial system because they live on the wrong side of one of these lines. He urged the industry to think more about how to provide appropriate products and services to meet those needs.

A Business Case, a Moral Imperative, and Leadership

Focusing on issues of diversity, equity, and inclusion makes “solid business sense,” Chairman Hood said, but it’s also a moral issue.

The Chairman said credit unions that embrace these principles could out-perform the competition. Diverse organizations, he said, are better at attracting and keeping talent, enjoy better financial performances, and have higher levels of customer satisfaction.

“There’s a strong and compelling case to be made in business terms,” he said, “but we should be encouraging more diversity because it’s the right thing to do and the responsible thing to do. We all benefit when more of our fellow Americans are able to contribute fully.”

The NCUA, Hood said, is dedicated to providing tools and support to help credit unions reach their goals in this area. He pointed to the agency’s Annual Voluntary Credit Union Diversity Self-Assessment as one example, and he urged credit unions to take advantage of that. He also said the NCUA intends to serve as a model and he announced the creation of a NCUA Culture Council to focus on issue of inclusion with the agency.

Chairman Hood called the credit union industry to take up the mantle of leadership, as well.

“The commitment to diversity, equity, and inclusion must be part of this industry’s cherished value of ‘people helping people,’” Hood said. “The next step forward is to affirm that commitment by creating plans that will bring those promises and hopes to fruition and then starting the hard work of making those aspirations a reality.”