ALEXANDRIA, Va.-While the seventh floor of NCUA's Alexandria,Va. headquarters is fairly quiet right now with two empty boardoffices, NCUA Chairman JoAnn Johnson has declared a `new day' atNCUA, a theme that she has conveyed to agency senior staff. Thetwo-member NCUA Board over the last 18 months has kept some issuesat bay, Johnson said, but no longer. With the full complement ofboard members expected by the Nov. 29 board meeting, items Johnsonwished to address that were held up by former NCUA Board MemberDebbie Matz' de facto veto power, will get their chance before theboard. The November meeting is expected to be a busy one with theagency's budget and setting of the overhead transfer rate, as wellas four community charter conversions, at the very least. When NCUAExecutive Director Len Skiles presented the agency's proposed 2006budget in October at the budget briefing, three full-timeequivalents had been eliminated. “I continue to look for areaswhere, if resources aren't being used, if there's more that can beused better in another area, I continue to look for that. Thesewere slots that were not being used and we had more immediate needsfor these slots,” Johnson stated. “We've done a much better job onfilling our vacancies and we continue to work on that.” Staffingwas one area that Matz and Johnson could not find agreement on.“Ms. Matz and I worked well together,” the chairman explained.“There were from time to time issues that may have been delayed orjust couldn't be addressed at the time.” Johnson wanted to cut twoopen full-time equivalent slots last year from the 2005 budget, buther Democratic colleague would not permit it. Looking ahead,Johnson said, “It's a new day at NCUA and I think this is anopportunity to move forward in a positive manner with two bright,very intelligent board members coming on…Having a board at fullcapacity-you know, it's been a year and a half since that's beenthe case-that's very exciting.” Johnson continued, “I think inparticular Rodney Hood's background in the community developmentand in the housing area, that will be a nice asset for him tobring. His experience will be very valuable. “And, of course, Gigihas experience in the corporate (credit union) area but in thecredit union community as well. She thoroughly understands creditunions. Both of them are very enthusiastic. I look for a new energyhere,” Johnson commented. She added that she thinks their threephilosophies will align, having known both of them from previouswork with the agency. Hood spoke at an Access Across Americaworkshop on the agencies' rural housing agreement and Hyland workedwith the agency on the corporate regulation overhaul. Johnson saidthat going forward, she would like to make clear that Access AcrossAmerica is an agency initiative and continue its outreach work tohighlight federal partnerships the agency has established. “I amlooking to perhaps make more of an agency initiative that will giveeach board member the opportunity to do outreach for the agency butdo it more under an umbrella of the agency,” she explained. “Ithink it utilizes our staff to a better degree and also [for]scheduling.” The program's focus is currently on increasing creditunion participation in Health Savings Accounts in partnership withthe Treasury Department. NCUA is also trying to increase creditunion work in the Volunteer Income Tax Assistance program with theIRS. And, of course the former teacher stressed the importance offinancial education. “That's probably the foundation for everyother program,” she said. Credit union capital has been a hotbutton issue whether at the regulatory or legislative level. NCUAis working steadily to try to get risk-based capital provisions inthe Financial Services Regulatory Relief Act (H.R. 3505) alreadyincluded in the Credit Union Regulatory Improvements Act (H.R.2317). “We continue to support that very strongly,” she said.“Hopefully, it will get in one of these pieces of legislation.”“For some reason, there seems to be that agreement on one side thatthere will be no more changes, and even after that there were somebanking provisions that were added,” Johnson noted. “But, there areseveral members of Congress that are very supportive and I thinkwill continue to try to make this a part (of the legislation) inthe markup or at some point, hopefully, they will be able to put itin.” She continued, “I've talked even with other regulators andthey agree that it's a regulatory tool for us and so I would hopethat the rest of the committee will recognize it for that: a toolthat helps us recognize problems earlier.” Johnson also noted thatthe bankers are already trying to revise their capital system whilecredit unions are just now trying to move to a risk-basedframework. Capital initiatives that came out of NCUA's CapitalSummit a year ago were lowering credit unions' net worth benchmarkfor RegFlex eligibility and allowing low-income credit unions torelease secondary capital deposits after they have outlived theirusefulness for PCA have been issued by the agency in the form ofproposed regulation. The other idea raised at the summit wascreating a risk-based capital system for corporate credit unions,which would not require statutory change. Chairman Johnson said shedoes have agency staff working on the matter. She said she does nothave a timeline on when the agency will release that proposal. NCUAstaff are also reviewing the examination matrix and “whether thatneeds to be tweaked or totally eliminated.” One of the key issuesthat Johnson pointed out in talking to people throughout the creditunion community is expanding their investment opportunities. “I'vedirected staff to take a look at derivatives and perhaps someadditional pilot programs and look at it with a focus on how tomitigate risk instead of just saying `this is a problem, we don'twant to go there.' If it's a problem, let's see if there is a wayit can be done,” she said. She touted pilot programs and said shewould be looking into more to expand credit union investments. Sowhile some items have been stymied over the last 18 months with atwo-member board of opposite political parties, Johnson isoptimistic about the remaining two years on her term. “I have agood two years left on my term. I have a lot of time goingforward,” she said. However, the chairman added, “I'd wish theappointment/confirmation process were perhaps structured a littledifferently because that is an unusually long time to leave aposition open. Could some things have been accomplished in thattime? Probably, yes. But I'm optimistic that going forward we'll beable to pick up and get quite a few things done.”[email protected]