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Updated: August 17, 2023

Federal regulator voices confidence in Maine credit unions

Two men standing in a credit union Courtesy / Maine Credit Union League From left, President Luke Labbe of PeoplesChoice Credit Union in Saco with Rodney Hood, past chairman and current board member of the National Credit Union Administration.

Maine’s credit unions are in good financial shape, according to Rodney Hood, past chairman and current board member of the National Credit Union Administration.

“Maine’s credit unions are well capitalized,” the Washington, D.C.-based regulator told Mainebiz after meeting with representatives of several Maine credit unions and the Maine Credit Union League earlier this week in Saco.

Hood’s agency, created by Congress in 1970, insures deposits at federally insured credit unions, protects institutions’ members, and charters and regulates federal credit unions nationwide.

While federally chartered and insured credit unions are required to meet a 7% minimal capital threshold known as the net worth ratio, the average for institutions in the Pine Tree State is 10%, he said.

“That means they’re making good loans, and there’s not any diminution in credit or asset quality,” Hood said. “I am really proud of them.”

He also noted that 94% of Maine credit unions have the two highest scores of 1 and 2 in the CAMELS rating system, a widely accepted measurement in the financial industry that measures capital adequacy, asset quality, management earnings, liquidity and sensitivity. The national average is 80.8%.

Hood’s visit came two weeks after federal financial watchdogs including the NCUA updated guidance on liquidity risks and contingency planning to ensure that depository institutions regularly evaluate and update emergency funding plans.

For credit unions in Maine, Hood noted that there are a number of available liquidity sources when needed, including Westbrook-based Tricorp Federal Credit Union.

Hood, a native of Charlotte, N.C., spoke to Mainebiz after a meeting hosted by PeoplesChoice Credit Union at its Saco headquarters.

PeoplesChoice ranked No. 12 among the largest Maine-based credit unions, with assets of $320.3 million as of Sept. 30, 2022, according to the 2023 Mainebiz Book of Lists.

Offering his take on Hood’s visit, PeoplesChoice President Luke Labbe said, “Rodney Hood is a great champion for credit unions … Hood’s comments about affordable housing, serving the unbanked and underbanked, and small business lending really highlighted what credit unions are trying to do.”

Labbe also welcomed the fact that Hood highlighted the importance of “right-sized regulation,” which Labbe called a “big concern” for the industry.

“Credit unions can make a huge difference in their communities, but it is important to remember that they are still small businesses and many of the regulations that are meant to police big banks may hurt credit unions as they try to serve their members,” Labbe said.

Hood said his key takeaway from the visit is that Maine credit unions “are all committed to the credit union ethos of people helping people by providing their 600,000 members with access to affordable financial services and helping them achieve financial empowerment and capability.”

The message Hood aimed to convey to credit union leaders in attendance: “I gave them a message of hope and regulatory empowerment,” he said.

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