PALM DESERT, Calif.–NCUA Chairman Mark McWatters updated the California/Nevada Leagues’ REACH meeting here on three different issues: What the agency is up to in CU-facing activities; internal changes, and the merger of two of the funds it oversees.
McWatters said the agency has been reviewing all of its regulations, including identifying those that are easiest to change and which deliver the “biggest bang for the buck.” He updated credit unions on the revised member business lending rule; alternative and supplemental capital; the right to appeal NCUA decisions; changes to stress testing, and the proposed voluntary merger rule.
Looking at NCUA itself as an agency, McWatters noted NCUA is in the process of closing two (40%) of its offices, a process he noted will not take place overnight, as he said it’s important to him to transition people in the right way. In addition, it has been making some small changes to Call Reports.
“We are also setting up a virtual examination shop, a think tank-like group, to try to figure out the best way to examine credit unions virtually,” said McWatters. “Instead of just guessing at this, we said, let’s find smart people who understand something about this and let them come up with a plan and implement it, slowly, but try to do something groundbreaking here.”
McWatters pointed out that examiner pay and travel make up more than 70% of the agency’s budget, and it is investing to reduce that expense.
Finally, McWatters walked his audience through the consolidation of the Temporary Corporate Credit Union Share Insurance Fund (TCCUSF) and the NCUSIF. As CUToday.info has reported, the board voted in September to consolidate those two funds as a means of addressing issues related to both funds. One result is that in 2018 credit unions will be receiving their first refunds out of the TCCUSF, although CUs could also be paying more due to the increase in the Normal Operating Level of the NCUSIF (but with no assessment charged at this point).
As an aside, McWatters said NCUA “grossly overpaid” the law firms in the litigation against Wall Street banks over failed NCUA investments. The two law firms representing the agency have to date been paid more than $1 billion in total.
“I practiced law for 35 years and I always missed the billion-dollar payments,” he joked to the audience.