Underscoring a policy aimed at reaching out to small community banks and credit unions, the Federal Reserve Board and its district banks last week began completing a series of high-level CEO appointments to its new advisory panels.
Credit union CEOs from Oregon to New Hampshire were picked for the newly created Community Depository Institutions Advisory Councils, and many of the CU leaders are ready to take on a more vigorous advocacy role with debit interchange a hot button before the central bank.
At the same time, there were skeptics among the CEOs about how much might be accomplished during the infrequent meetings of the panels that will be set up at both the national level in Washington and at the regional banks.
There was also curiosity about how much tension might exist among CEOs representing competing CUs and banks, all at the same table discussing Fed policies.
"I’m not sure the biggest banks care as much, but some of those community banks are the most adamant about stopping credit union expansion. And I know some of them, and they’re fine guys, but they say ‘I don’t like what you do’ and we say the same," said Carl Ratcliff, president/CEO of the $350 million APNB FCU of Chesapeake, Va. He was named last week as a member of the Richmond Fed’s council.
Ratcliff is one of two CUs on the 12-member Richmond panel, along with Jan Roche, president/CEO of the $1.2 billion State Department FCU of Alexandria, Va. Like other Fed councils, the Richmond Fed’s is dominated by CEOs of regional and community banks.
Ratcliff, who said he probably got picked as the result of a Virginia Credit Union League endorsement, said also he has already been briefed about the first meeting, to be held March 3. He received a questionnaire listing such issues as deposit demand, housing concerns, inflation and economic conditions "and one marked regulatory matters and payments." On that, he expects to bring up interchange.
Echoing Ratcliff on council agendas, Glenn Barks, president/CEO of the $1.6 billion First Community CU of St. Louis, said he was "certainly looking forward toward representing our industry, and I sure will be eager to hear what the bankers have to say."
The first meeting of the St. Louis council was scheduled this Tuesday and Wednesday, and among the issues he intends to discuss will be debit interchange plus "the delinquency problem, mortgage refis, and what we’re going to do about Fannie and Freddie."
In these kinds of forums, however, he said, "there is just so much talk," but he said he remains optimistic about accomplishments.
Another appointed member of the St. Louis group, William J. Rissel, president/CEO of the $930 million Fort Knox FCU in Radcliff, Ky., said he is eager to discuss compliance and the huge cost financial institutions are all bearing and what the Fed intends to do about it.
"I believe the bankers will be surprised at how similar many of our interests are," said Rissel, adding, "I know it will be a great learning experience for me, and hopefully a learning experience for all concerned. Beyond that, I certainly hope bringing a credit union voice can make a difference."
On that a CUNA spokesman said its staff has long been "making a concerted effort to ensure there is greater credit union representation on all of these Federal Reserve Bank regional advisory councils."
"We do the same with the Fed’s national level advisory bodies including the Consumer Advisory Council," he said, noting, "The Fed collects data on credit unions, but sometimes does not have an extensive understanding of how credit unions operate and the ways we differ from banks."
Two of the top CU appointments to the national council were Randy Smith, president/CEO of the $4.2 billion Randolph Brooks FCU of Live Oak, Texas, and Michael Kloiber, president/CEO of the $2.3 billion Tinker FCU, Oklahoma City.
Smith told Credit Union Times that having more CU representatives on these Fed bodies "can provide a unique perspective–especially as it pertains to serving low- and moderate-income consumers."
"I appreciate that the Fed board decided to greatly expand and rename the old Thrift Institutions Advisory Council to include more representatives from community institutions," said Smith, recalling that he served on TIAC during 2009 and 2010.
"I had the opportunity to learn a great deal about how economic, legal and regulatory issues impact other financial institutions throughout the country," said Smith, noting that Fed board members seem "eager to learn about economic conditions on Main Street USA."
At the national level, Smith said his role will be to represent the Dallas Community Depository Institution Advisory Council before the Federal Reserve Board and that gaining input from representatives from all Federal Reserve Districts with various types of charters will give the Fed broader knowledge of how its policies and regulations are impacting the various communities.
The Fed "has a tough mandate: keep inflation and unemployment low," observed Smith. "Hopefully, the various CDIAC members can provide useful input as to Fed policies that are working and the ones that aren't."
One CU member of the Boston Fed’s council, John Dwyer, president/CEO of the $800 million New England FCU, Williston, Vt., said he expects to discuss what he said is a key issue: "equal access to Fed services" among all financial institutions.
"I think it is important that other credit unions understand the efficiency of Fed processing and access to check clearing services," said the longtime member of the Boston Fed and major user.
Though his CU does use corporates, "we have found it cost- effective to use the Fed and we expect to continue," said Dwyer, who heads up Vermont’s largest CU.
Dwyer said he too is prepared to bring up card interchange but Fed access "can be a focus" of the meetings as well.
Dwyer was not sure why there are three CEOs of New England CUs on the Boston Fed CDIAC, whereas elsewhere there are just two, with the San Francisco Fed having just one CU representative, Ron Barrick, president/CEO of Advantis CU of Milwaukie, Ore.
In addition to Dwyer, the other two CDIAC reps at the Boston Fed are James W. Blake, president/CEO of HarborOne FCU, Brockton, Mass. and Michael L'Ecuyer, president/CEO of Bellwether Community CU, Manchester, N.H.