NCUA Outreach Task Force Recommends Continued Data Collection
ALEXANDRIA, Va. -- NCUA Board Member Gigi Hyland, who chaired NCUA's Outreach Task Force, has announced the results of a year's compilation and analysis of comments resulting from her series of town halls and other meetings.
In the end, the task force, comprised of agency officials, recommended to the board that NCUA continue its Member Service Assessment Pilot as part of credit unions' regular examination and 5300 Call Report process. If the recommendations are accepted by the board, the information would be published in aggregate and the agency would establish a method to share individual credit union information with that institution.
The MSAP grew out of questioning by former House Ways & Means Committee Chairman Bill Thomas (R-Calif.) and the Government Accountability Office as to concrete evidence credit unions were serving their entire fields of membership, particularly those of modest means. In the MSAP, NCUA staff previously submitted recommendations to the board, which Hyland followed up on with the Outreach Task Force's six town hall meetings last year, aimed at gathering information from the credit union community.
The MSAP report concluded that federal credit unions are succeeding in serving those they are chartered to serve, but given greater scope and opportunity, federal credit unions can improve the availability of financial services to low and moderate income consumers and those living in underserved areas.
"The aim of the agency is to get a better understanding of member income levels and have it at the ready," Hyland said.
One possible use of this data could be in preparation for a series of hearings House Financial Services Committee Chairman Barney Frank (D-Mass.) has announced he will hold regarding the expansion of the Community Reinvestment Act.
NAFCU President/CEO Fred Becker maintains that there is no need for continued data collection. "First of all, I'd note this was identified as a pilot program and we remain concerned about any continued data collection." He also questioned "whether the data collected will provide any meaningful assessment." Becker highlighted that neither NCUA nor the GAO looked at the Home Mortgage Disclosure Act data, which, he asserted, shows that credit unions are outperforming the banks even though they are subject to CRA.
"This is going to lead to additional and unnecessary regulatory burden...The burden on our financial institutions has never been greater than now and credit unions have carried the greatest burden," Becker stated.
CUNA President/CEO Dan Mica acknowledged similar concerns but said the organization's various machinations would be mulling it over. "Given that credit unions are the most regulated of all financial institutions, we do have concerns about any new regulatory burdens being imposed on them," he said last week. "Our Governmental Affairs Committee is meeting in town at week's end, and the Outreach Task Force report will be a major point of consideration. In fact, Board Member Hyland will be on hand to discuss the report's recommendations with our group. Further, as our Governmental Affairs Conference gets underway next week, we are certain that the task force's report will be discussed widely among the delegates."
According to NCUA Board Member Hyland, the credit unions that went through the pilot program said they didn't really see the experience as very burdensome at all.
"The majority of credit unions have computers and are able to collect the information electronically," Hyland said. However, Hyland said 52 credit unions are still not computerized and the work would have to be done manually there.
Becker disagreed, saying that the totality of credit unions' regulatory burden meant any new requirement would be burdensome. He also stressed that if any of these recommendations are adopted, they would only apply to federal credit unions.
When asked about the parity issue, Hyland responded, "The task force considered a wide berth of pros and cons with regard to this."
Another feature of the report--the disclosure of executive compensation--has been a highly touchy subject among credit unions. Hyland announced that the task force found that the compensation of the three top executives at each credit union should be collected and released publicly in aggregate. Under the recommendations, the actual compensation for each of the top three would also be provided to the credit unions' membership. "The rationale behind this is it's sound public policy," Hyland said, noting that it is the trend among other non-profits.
Citing the GAO report, she added, "We disagreed. The general public is not entitled to disclosure." Depending upon the field of membership though, it may very well mean the general public, she said.
The task force also determined that low-income designated credit unions should be determined by median family income, rather than median household income as is currently NCUA's practice, and that the agency's outreach programs, like Access Across America, should target all federally insured credit unions.
National Federation of Community Development Credit Unions President/CEO Cliff Rosenthal, whose members may or may not be specifically impacted by these last two points, said he was still reviewing the report and was not prepared to comment on it at press time.
Generally speaking, Hyland remarked, "Nothing could be done with the report, on the one end of the spectrum. On the other end, all the recommendations can be approved." The board could take up some, all, or none of the report but, she noted, not all the recommendations require a notice and comment period. However, the importance of the issues might warrant it.
She concluded, "The report identifies serious, specific recommendations to help federal credit unions serve consumers across all parts of their fields of membership, consistent with the purpose set forth in the preamble to the Federal Credit Union Act."