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<p>WASHINGTON-In a recent letter, NAFCU praised NCUA’s efforts to streamline the select employee group (SEG) approval process and noted the agency’s successes. Agency efficiency has been the hallmark of NCUA Chairman Dennis Dollar’s time in the head position and credit unions have been highly receptive to the idea. “In bringing to the agency’s attention in early 2000 our members’ concerns and acquiring the agency’s commitment for processing guidelines for SEG applications, NAFCU believed that once NCUA resolved some of the bureaucratic constraints and provided consistent procedures for evaluating SEG applications, approval rates and the number of total deferrals would drop,” NAFCU President and CEO Fred Becker wrote in a January 10 letter to Dollar. “The evidence now appears clear cut as reflected in the approval rates [increasing] and with the total number of deferrals dropping (as of October in each year) from 1,845 in1999 to 1,332 in 2000 and 748 for 2001.” This totals 63.4%, 69.1% and 54.1%, respectively, according to NAFCU. NAFCU’s research and analysis division compiled data in several areas concerning SEG approvals, which were included in a memo attached to the letter. The percentage of SEGs approved jumped from 86% in 1999 to 89.3% in 2000 to 93.9% as of October 2001. Groups approved with more than 3,000 members-the benchmark where the group must demonstrate why is should not form its own credit union-increased from 4.6% in 1999 to 23% in 2000 to 39% through October of 2001. Becker also noted that Dollar and former Board Members Yolanda Wheat and Geoff Bacino emphasized the importance of the SEG approval process in public appearances. But he specifically credited most of the work to Dollar. “Mr. Chairman, the dramatic turn-around in the SEG approval process is a model example of the way that you have guided the agency-by listening to and fairly evaluating the substantive comments and concerns of you stake holders and then taking appropriate action,” Becker wrote. He commented that, in the past, many credit unions expressed “utter frustration with the agency” over the SEG approval process. NCUA’s staff has been tracking this information for its own purposes as well. One of the efficiency improvement items the NCUA Board approved this year was a regulation permitting SEGs with less than 500 members to apply online. A great deal of the increase in SEG approvals has been in these size groups. In 2001, 1,363 credit unions added 13,589 new groups with 2.3 million new potential members. Of those new groups, 13,003 were under 500 members. The average group size was 170, according to NCUA statistics. Already through January 16, 2002, 197 credit unions have added 335 new SEGs with nearly 68,000 new potential members; 320 of the SEGs have less than 500 members. The average size of the groups so far is 202. Not only are more credit unions getting through the process, they are getting through faster. The average time for groups under 2000 to get approved was 0.96 days last year. Denials of groups of that size took an average of seven days. SEGs over 3,000 took an average of 3.91 days for approval in 2001. The numbers for 2002 are slightly higher since its only two weeks into the year. “We are pleased with the average of less than two days for the processing of these expansion requests. However, as we continue to focus on improvements throughout the agency, this will also continue to be an area of particular of interest,” Special Assistant to the Chairman Nick Owens said. The assets size of credit unions adopting SEGs may be becoming more diversified, early statistics show. Last year, 77% of credit unions adopting SEGs held more than $75 million in assets. So far for 2002, only 54% of SEG approvals have gone to credit unions of this size. The credit unions in the $20-$50 million range are creeping up with 39% of the SEGs added this year. [email protected]</p>

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