Remember the 1980s when we were introduced to Grey Poupon?My brother and I, in elementary school at the time, would affectsnooty accents and ask, “Pardon me, would you have any Grey Poupon?”“But, of course.” Malcolm Gladwell, in his book What the DogSaw, points out that until that time, French’s dominated themarket, but by the end of the 1980s there were several differentbrands and varieties of mustard.

Little has changed in the world of ketchup, however, Gladwellnoted. Heinz is the clear leader and there’s practically novariety. In fact, the only real change has been from glass toplastic bottles that young children – including even adolescentslike my son who ketchups everything – can squeeze for themselves.Apparently there are ketchup tasting experts (my son should apply)who determined that Heinz ketchup is the perfect blend of the humantaste palate. The story concludes by quoting a formerly buddingketchup pioneer, “I guess ketchup is ketchup.”

The NCUA board chairman is credit unions’ Heinz ketchup. Thepackaging may change, but the person in that position stillcontrols policy and the agency agenda. That person, in fact, has amonopoly over the agenda, which is seasoned to the political tastesof the day. An interesting aside: Ketchup’s modern day balancedflavor can be accredited to innovation brought about when agovernment agency decided the 19th century preservative used wasunsafe. Heinz came out the new taste winner. See, regulation canforce innovation!

For a relatively minor regulatory agency in the grand scheme ofthings, the NCUA is certainly garnering a lot of attention rightnow. Talk of expanding the size of the NCUA board, giving theagency third-party oversight, budget hearings and studies offinancial institutions’ level (or lack) of regulatory capture isrearing its head in Washington. But as campaigns ramp up, actualprogress typically winds down. Political activity tends to beinversely proportional to policymaking.

Talk is yet again kicking up about increasing the NCUA boardsize from three members to five. It sounds mundane even as I writeabout it, but it brings about some pretty strong feelings – likebenzoate as a ketchup preservative. Who knew?

NASCUS has long pushed to expand the board to includerepresentatives from the state regulators. NAFCU is opposed becauseas it stands, federal credit unions fund the operating budget ofthe NCUA; the board expansion would likely cost $1 million insalaries alone for the new board members and their staffs. CUNA hasbeen quiet on the issue thus far. The Government AccountabilityOffice is wondering whether a three-person board lends itself togreater potential for industry capture – despite the limit of onemember with direct credit union experience in the last year. HouseFinancial Services Committee Chairman Jeb Hensarling even givesadding a Credit Union Advisory Council a mention in his latestpiece of legislation to reform Dodd-Frank.

While I don’t believe industry capture is a concern at the NCUA,a five-member board will help avoid that appearance and theaccusations that the bankers level all the time. They particularlywon’t be able to complain given the FDIC board comprises fivemembers. Credit unions are usually asking for parity; here’s anopportunity.

I’m not typically one for bigger government, but this just makescommon sense. Currently there are two board members on thethree-member board following the exit of former Chair Debbie Matz.One is a Democrat and the other is a Republican. Both are wellversed in the issues, but definitely seem to have different ways ofgoing about them. If a serious issue were to arise, the strongpossibility exists that each would have an entirely differentmanner of going about solving the problem. Where does that leavethe credit union community? This conundrum is less likely to arisewith five board members.

It’s not as if this situation is an anomaly. Years ago Matzserved with then-Chair JoAnn Johnson, a Republican. At one point,then-NCUA Chairman Dennis Dollar was the sole board member. Imaginea situation the magnitude of 9/11 with only one sitting boardmember and no diversity of opinion or experience. What if that loneboard member had been a hardline dictator rather than alevel-headed person? It happens. Even normal industry regulationcan be held up while the board as it’s currently structured awaitsa third member. The current set up is impractical.

Others may say quite the opposite. The NCUA board meetings couldrun on and on and on and on with the customary politicalpeacockery. Standard time limits can be set to eliminate thisproblem. The House can manage the preening of 435 representatives,so surely the NCUA board can handle five. The FDIC does.

Vendor oversight is another area where the NCUA does not haveparity with its fellow regulators. The Financial Stability Oversight Council’s annual report renewedits call for the NCUA to be given examination authority over third-party vendors that servecredit unions. Financial institutions, particularly credit unions,outsource a lot if not all of their technology, including coreprocessing. These companies are as important to serving creditunion members and the credit unions.

The NCUA may not have the expertise or resources to overseethese companies, so that’s a huge hurdle, but it seems thatsomething should be done. The agency could work with existingregulators of these companies to glean the information they need toensure the safety and soundness of the systemically importantorganizations. Most credit unions were just as dependent upon thecorporate credit unions as they are on some of their vendors; theonly difference was the direct hit to the share insurance fund.When trouble arose in that sector, the agency had to scramble tocobble together a solution that benefited the entire credit unioncommunity in the long run. One can empathize with the agency notwanting to be caught in that position again, and the credit unioncommunity shouldn’t want to be either.

The ultimate question is, does the industry want good policy orcheap policy?