For many American consumers, 2023 represents an opportunity to begin rebuilding their financial health and wellness goals that were essentially detonated with the arrival of the COVID-19 pandemic three years ago this month.
With federal policymakers enacting substantial relief and recovery measures in 2020 and 2021 to buoy the economy and relieve financial suffering, the measures enacted in May 2020 helped fuel an economic recovery that made the deepest recession in the post-World War II era also the shortest.
Let there be no mistake, however: according to CNBC in November 2022, long COVID was still affecting as many as 23 million Americans while costing the U.S. economy $3.7 trillion, roughly that of the Great Recession. Higher medical spending is marked for $528 billion of that total, but lost earnings and reduced quality of life represent other gradual “trickle-down” effects, the price of which cost Americans $997 billion and $2.2 trillion, respectively.
All of this is to say that while COVID continues to affect American lives, both financial and otherwise, considering the proactive actions taken on state and federal levels to stabilize the financial markets – not to mention the credit union movement’s well-documented adaptability in limiting the destructive fallout – the results could have been substantially worse.
Entering 2023, the prevailing feeling among many financial analysts appears and NCUA leaders to be that the year will be one of economic recovery and increased household cash flow acceleration. It also represents an opportunity for consumers to reevaluate their financial literacy, health, and wellness goals moving forward.
NCUA leaders emphasize financial wellness recovery at CUNA GAC
Credit union members’ efforts to find their way back to financial wellness needs to be met with wise, stable, and progressive financial services leadership from their local institutions and federal NCUA leaders, traits long-known to those in the credit union movement.
Such sentiment was more than apparent throughout February’s CUNA Governmental Affairs Conference in Washington, D.C., particularly from two long-time National Credit Union Association (NCUA) luminaries, Vice Chairman Kyle Hauptman, and board member and former NCUA Chairman Rodney Hood.
NCUA leaders Hauptman and Hood took to the podium to update attendees on NCUA updates and objectives, growth in financial wellness initiatives, and the healthy balance that must exist with industry regulations to empower credit unions and their members.
“I can say that both the credit union system, and your NCUA insurance, are in pretty good shape,” Hauptman said in response to recovery efforts. “NCUA’s insurance fund is at 1.30 percent of insured assets, having recovered from the dip caused by the pandemic stimulus. Plus, the fund is entirely invested in U.S. Treasury bonds, which tend to increase in value during economic downturns.”
Hauptman also applauded the financial wellness efforts of credit unions while encouraging the movement to endeavor to find new ways to accomplish more.
“Our society isn’t the best at getting people to save and invest. This is where credit unions come in with financial literacy and savings programs that improve members’ financial wellness,” he continued. “As you all know, financial wellness isn’t just about a retirement that may be decades away. It’s peace of mind that makes every day better. It’s knowing you can lose a job and not lose your home. It’s about being able to leave a job you hate and pursue one you love. Financial wellness can save relationships. Financial wellness is a great product to buy if we value it more than the ways we can spend money.”
Hauptman highlighted his priorities on the NCUA board that included modernizing the organization’s transparency and feedback performance and moving forward in harnessing the power of blockchain technology and the growth of digital assets.
Former NCUA Chairman and current board member Rodney Hood – who also served on the Board during the financial crisis in 2008 – advised the credit union attendees: “don’t be alarmed but be alert and be prepared” as the industry heads further into the new year that many have predicted to be economically difficult.
Hood also communicated his philosophy on regulations as they pertain to supporting the best interests of the credit union movement. “I’ve always said we need a regulatory system that is effective without being excessive, and I believe the purpose of regulation is not to hinder credit unions – the purpose is to empower credit unions so your institutions can provide the highest level of service to your members and communities.”
And Hood is absolutely right. As our credit union cooperatives grow larger and more complex, the regulatory framework with which the movement operates must keep pace to keep up with the strength and economic stability of the whole system. Per the NCUA’s rulemaking the organization – and the industry, overall – is better equipped to respond to both sudden and gradual change in order to address risk.
The NCUA leader illustrated several case studies where he witnessed firsthand the credit union difference that has transformed the hopes of financial wellness for entire communities and regions throughout the U.S., while painting a vivid picture why the movement “remains a vibrant, innovative part of the financial services ecosystem” in America.
“The ethos of ‘people helping people’ remains as compelling today as it was a century ago when the cooperative finance movement really started picking up momentum,” Hood explained. “Your mission is to keep that momentum going and to carry the values of the credit union industry forward for future generations.”
