By Frank J. Diekmann
Have we been given a sneak preview of what the trade groups plan to say when NCUA hosts its budget briefing in October?
We may well have.
NAFCU, CUNA, NASCUS and individual credit unions have all been demanding more input into the agency’s budget for some time, which they often refer to as “transparency.” It’s not exactly a new issue; it’s a softball “we’re working for you” issue for the trade groups, which I believe began challenging the NCUA budget before Lt. Gen. Herman Nickerson, Jr., had even finished being sworn in as NCUA’s first administrator.
NCUA Chairman Rick Metsger told me earlier this year the agency already has a significant amount of budget information on its website for the world to review, but the page is seldom visited.
One thing I have been wondering about is where the trade associations plan to focus their attention when it comes to the agency budget. Obviously, the calculators will be out working the expense side of the ledger. This is especially true since the trades have been paradoxically lobbying for expansion to a five-person NCUA board, since, as we all know, nothing increases federal government efficiency more than making a bureaucracy larger.
Given that adding two more seats to the board would entail at least a million dollars in annual costs, the question I’ve been mulling is where will the trade groups press for cuts. Now, I believe, we have a preview.
Mission Creep
In a recent op-ed in CUToday.info, Michigan CU League President Dave Adams said it is clear that the agency’s mission is to “provide, through regulation and supervision, a safe and sound credit union system, which promotes confidence in the national system of cooperative credit,” and used NCUA’s reason for being to suggest some significant mission-creep has occurred.
“In the 46 years since the NCUA was created, the agency has moved beyond its mission into a wide variety of ancillary activities,” wrote Adams. “In addition to direct-to-consumer outreach, promotion of financial literacy, assistance for small credit unions and to low-income designated credit unions, the NCUA is now active in business consulting designed to help credit unions ‘grow, innovate and provide better member services.’”
You can read Adams’ full op-ed here, but the thrust of the piece, as he wrote, was that “one should question why the NCUA should be engaging in any of these areas considering they do not involve ensuring the safety and soundness of credit unions.”
He went on to cite the resources NCUA makes available to consumers that he said can easily be found elsewhere, including financial literacy tools, many of which are already duplicated at mymoney.gov, he said.
He further challenged why NCUA’s Office of Small Credit Union Initiatives (OSCUI) continues to promote the low-income designation, when those efforts are already duplicated by other organizations, why its Office of Consumer Protection is hosting a live chat, and why it offers free consulting services, none of which have to do with safety and soundness.
Come October, I would imagine it’s a safe-and-sound bet NCUA will be hearing much the same thing, and not just from the Michigan league.
An Historical Moment
The passing of former congressman Steve LaTourette deserves mention; indeed, much more mention than we can afford him here. Mr. LaTourette died last week at 62 from pancreatic cancer.
If you were not around in credit unions during 1997-98—two years that have forever changed credit unions—then you have no idea how different the world was then or how strong was the threat to credit unions.
When the Supreme Court sided with the bankers in a lawsuit over the FCU Act and field of membership—a decision announced to stunned silence at CUNA’s GAC—credit unions were left flat-footed with their backs to the wall. The American Bankers Association and all the state banking associations were at that time a powerful, big-bucks presence in Congress; credit unions had PACs, sure, but were really more of a Let’s-Send-Some-Cookies-Over-to-Capitol-Hill-in-Conjunction-With-Credit-Union-Week type of force. The painful lesson was that just because you have a white hat doesn’t mean Dudley Duwrong and his big horse won’t step on it, even if your head is wearing it at the time.
Credit unions finally found two critical allies in Congress in LaTourette, the Ohio Republican who reached across the aisle to join Pennsylvania Democrat Paul Kanjorski to shepherd the Credit Union Membership Access Act—to be forever better known as HR 1151—through Congress. There was huge opposition and it was no easy feat—while the bill would eventually go on to pass Congress by a landslide margin, it is often forgotten it initially only got out of committee by one vote.
If you don’t think any of that really matters, how do you think you’d enjoy serving your single SEG right now—and that’s assuming your sponsor company is even around anymore?
Latourette and Kanjorski will forever have a prominent place in the Great Book of Credit Union History, because without them, that’s exactly what credit unions might have been.
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.info and @FrankCUToday.