ANAHEIM, Calif. – Despite being in the strongest financial position ever to deal with the current downturn in the economy, credit unions are still not immune from the slump and must adjust to changes in the marketplace, says NCUA Chairman Dennis Dollar. “As you adjust to these changes of the moment, don’t take your eye off the vision that you have of where you want your credit unions to be five years from now, 10 years from now,” he said to the opening general session of the California Credit Union League’s annual meeting and convention. “I really believe that the focus on the future of where credit unions must go depends on that vision and innovation,” he said. Dollar, making one of his first speeches before a trade group since being named NCUA chairman, stressed the role the agency would follow in helping credit unions be visionary and innovative. “Many times we (as regulators) have become the stumbling blocks to vision and innovation,” he said. “I think we have a role to play in creating a regulatory environment that enables and empowers credit unions to be visionary and to be innovative. We have to facilitate your vision and your innovation whenever possible.” Dollar was warmly received by the audience and was praised by league President David L. Chatfield. “Under his (Dollar’s) leadership, I’m encouraged that the agency will demonstrate a greater understanding, a greater awareness, in response to credit union needs,” Chatfield said. Dollar stressed that the overriding goal of NCUA was still to ensure the safety and soundness of the credit union industry, a role he said he would never sacrifice. Even so, he said, “within the bounds of safety and soundness there is a great deal of flexibility that can be provided in a very difficult and challenging marketplace to adjust to those challenges and those changes.” He referred specifically to the events of Sept. 11 when terrorists slammed jetliners into the World Trade Center and the Pentagon. “No event in American history perhaps, and certainly in recent American history, has any more demonstrated how quickly things can change in just a matter of hours,” he said. “And the marketplace has changed as a result. “We don’t know how long it will be before the marketplace returns to normalcy – or if the marketplace will ever return to normalcy,” Dollar added. He said credit unions were well positioned to deal with whatever challenges are ahead. “Credit unions’ financial position has never been stronger than it is today,” he said, citing capital being at an all-time high, improved loan-to-share ratios, and the fact that delinquencies and charge-offs are at their lowest levels ever. “Credit unions are more safe and sound and stronger financially than they have ever been,” he said. “You have never been better positioned than you are today to deal with a period of economic downturn.” Credit unions, however, are not immune from the downturn and must be flexible enough to deal with changes in the marketplace, from an influx of deposits as a result of declines in the stock market to a run on deposits by members who are being laid off from their jobs. “These short term fluctuations have got to be managed diligently to make sure they do not create long-term problems,” he said. Dollar said credit unions have shown in the past that they could handle economic uncertainty and “I believe that you will again in the future.” Dollar also urged credit unions to look to that future in order to better serve their members. “Don’t ever spend so much time fighting the field of membership battle that you don’t realize that you also have a responsibility once you take in those members to find a way to serve them and to serve them well and to serve them better than you did last year, because I can promise you they’re going to be seeking that additional service. “We never imagined five years ago what would be the demands of credit union members today,” he added. “I can’t look into a crystal ball and imagine what their demands will be five years from now. But I can bet one thing: they’re going to be more demanding than they are today. They’re going to be looking for more services than they are today. And they’re not going to be satisfied for you to be able to say, `You’re in my field of membership.’ They want to know `what can you do for me now that I’m in your field of membership?’ ” [email protected]

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