Mica Discusses a Difficult 2009
Credit Union Times: What have been the highlights of 2009?
Dan Mica: We started the year with the corporate situation. The NCUA placed the two corporates [U.S. Central and WesCorp] into conservatorship, and this caused the creation of the stabilization fund, which we got through Congress in less than two months. That shows what happens when everyone in the industry pulls together. You can really make a difference. We were also able to get Congress to fix the item in the credit card bill so credit unions and other financial institutions aren't required to send out statements on open-end accounts be delivered 21 days before they are due. That was stopped quickly because of the work CUNA and the leagues did. Also, we persuaded Congress to raise the CLF's borrowing authority to around $40 billion. Also, when the House Financial Services was considering the Consumer Financial Protection Agency, we were originally told that the $1.5 billion threshold for being exempted was all we would get, but with a lot of work, we got it up to $10 billion. And we also got an exemption for the systemic risk fund for all institutions with assets of $50 billion or less, and that includes all credit unions. You have to take your victories a step at a time.
CU Times: It's also been a tough year financially for CUNA, and you've had layoffs and furloughs. How has that impacted things?
Mica: In a normal year, the accomplishments on the legislative and regulatory front would have been worth being proud of by themselves. But the difficulties that affected us and other trade associations have made things even more challenging. I am even prouder of how we managed our way out of the financial difficulties. We will end the year solidly in the black because the management team acted quickly. We will give a payment back to each employee, which will be approximately what they lost from the furlough. To be able to do that is a major achievement.
CU Times: What's been the biggest disappointment?
Mica: The fact that as I enter my last year and tally up the expenses that credit unions have had and the diminished clout because of the existence of two trade associations. In the 14 years I have been here, the system has paid $10 million in dues to NAFCU to be an alternative voice. This has caused us to have incremental victories but not much bigger ones. It made more sense to have two associations when NAFCU was started and there were 25,000 credit unions, now there are 7,000.
CU Times: So are you endorsing [NAFCU President/CEO] Fred Becker as your successor?
Mica: He's welcome to apply. NAFCU has some top-flight people, and some of their programs are great. We should find a way to unite the movement because it can undoubtedly do more as a single entity than as two warring factions.
CU Times: What's the likelihood?
Mica: There is more talk about it than I've heard in a long time, especially from those who are most active in the movement. My departure removes an obstacle and the cost savings makes sense. It's been the most frustrating part of my career at CUNA. We should stop our fighting among ourselves and charge the Hill as one.
CU Times: With a new president and a more active Congress, what have they been like to work with? Has anything that has surprised you by the policies?
Mica: Our access has been wonderful, and I welcome the willingness of senior officials to listen to our ideas. [Assistant Treasury Secretary] Michael Barr and [Small Business Administration Administrator] Karen Mills have been receptive to us, and they are supportive of what credit unions do. Congressional leaders have been willing to listen, both in the House and Senate, even when they don't agree with us.
CU Times: What about the NCUA? How as Chairman Debbie Matz been to work with, and what do you think of her policy initiatives?
Mica: We won't agree with her on everything, but she believes in credit unions and wants to create a safe and sound environment for us to operate in. She's knowledgeable, and there was no need for her to ramp up much when she took office. She's not just a placeholder for the professional staff, and she's hands on. We are pleased by the letters she wrote about member business lending and alternative capital.
CU Times: What haven't you liked?
Mica: Before she came on board, the secrecy surrounding the conservatorship of the two corporates. The whole question of the corporates is a source of deep concern for our members. They want to know what the system will look like and what organizations will perform the functions that the corporates do.
CU Times: What will 2010 be like for credit unions?
Mica: I don't think it will be a great year. There will be a turnaround and credit union executives say they see a light at the end of the tunnel. By January 2011, we'll have most of the bad stuff behind us and be in a period of upturn.
CU Times: Will the consolidation continue?
Mica: It will continue and speed up because you'll have pressures of size and margin.
Some of the closings are collateral damage to what's happened and some are part of the business life cycle.
CU Times: What concerns your members most?
Mica: Everyone has a different perch from which they view things. But the largest number say something needs to be done about alternative capital. We have to remind lawmakers that it's not for failing institutions but to build up reserves. Other executives say member business lending. There would be 108,000 jobs created if the cap were lifted. A lot of people are expressing concern about what the landscape for corporates is. Also, some are concerned about UBIT, and there is always the worry about credit unions' tax status.
CU Times: Next year is an election year, talk about CUNA's political plans.
Mica: Our PAC is $4 million and growing. We'll be helping our friends. If the election were held now, the Democrats would almost certainly take a hit. But what will actually happen in November? It's too early to tell.
CU Times: Next year will also be your last at CUNA. Any thoughts on what you'll do next?
Mica: No firm plans. I've thought about starting a small consulting firm or joining another firm. I have thought about possibly going to the NCUA where I could offer some value to the credit union system. Also, some credit union-related businesses have approached me. But I won't do serious thinking until after the first of the year.