NCUA's Hood Expresses Openness to Digital Currency for CUs at NAFCU Conference
Hood says credit unions should "look carefully at these technological tools" such as Bitcoin and cryptocurrency.
During a speech on Wednesday, NCUA Board Member Rodney Hood said he sees a potential promising future for credit unions and technology in the form of digital products such as Bitcoin and cryptocurrency; but for now, there’s no rush to get there.
The comments came during NAFCU’s CEOs and Senior Executive Conference in Key West, Fla., being held this week as a hybrid event of in-person and virtual attendees. Hood said it’s the first time he’s given an in-person speech since the pandemic began last year.
He said jokingly, “Please be patient with me today, because I’ve spent so much time video-conferencing this last year, I fear my public speaking skills have atrophied.”
At the heart of his speech, Hood focused on the potential fintech opportunities credit unions might have with the growing popularity and member-service value of digital currency products. To make his point, he relayed a story of a small financial institution’s president in Charlottesville, Va., who launched Bitcoin access at branches and ATMs after customers expressed interest in using cryptocurrency.
“Now, time will tell how this plays out,” Hood said. “But I’m impressed that this small institution is taking such a forward-leaning approach, because that’s an important part of being competitive in today’s marketplace.”
Hood continued, “Now, let me pause to clarify, I am not saying that credit unions should rush into Bitcoin. But I am encouraging you to look carefully at these technological tools – whether it’s crypto-currencies, or digital payment platforms, or blockchain applications, financial data aggregation, remote capture check deposit – the list goes on and on – and think very hard about how they may, or may not, fit into your business models.”
The regulatory landscape for digital currency has not fully solidified, but with the new Office of Financial Technology at the NCUA currently being set up by Chairman Todd Harper, a project started under Hood’s time as chairman, there are hopes this new office will guide credit unions through the regulatory and supervisory needs surrounding fintech issues.
“We recognize these technologies are going to play a growing role in financial services in the years to come, so we want to be prepared to ensure they’re effectively integrated with the needs of credit unions and your members,” he said. Then he added, “My hope is that this office will be a source of insight and guidance as you navigate these uncharted waters, so I urge you to keep a close eye on that.”
Hood emphasized that fintechs behaving as financial institutions should be regulated as such.
“But my bottom line is that I want to encourage you all to explore the potentialities of these tools, and as a regulator, I want you to have the flexibility to do so. I want NCUA to lead on this issue, and I don’t want our examiners penalizing you for using these digital tools,” Hood said.