ALEXANDRIA, Va.-While NCUA had estimated over $2.7 million in savings on average every year over the next 10 as a result of its streamlining from six to five regions, according to NCUA Region VI Director Melinda Love, chair of the Regional Transition Committee, NCUA's budget should shave a few more dollars when all is said and done. As the credit union community pared itself down, NCUA felt the industry's regulator should do the same, she explained. "It really started back in our strategic planning sessions and looking at how the industry had changed over time with its capital growth and declining numbers and that as credit unions have grown larger, we have more and more that have state of the art management practices in place," Love said. She added that the technological infrastructure is now in place to make the transition of increasing the regions' geographic bases without increasing the risk to the National Credit Union Share Insurance Fund. NCUA's other risk-focused efforts also led the way. "We also started to look at how to move the decision making process down to as low a level as we possibly could," she said. "We started that process with our risk- focused exams and our risk-based scheduling and this seemed to fit into that same type of thing. By increasing geographic boundaries, you are forced to put more decision-making in the hands of examiners and supervisory examiners." Another factor, Love said, was that the agency, "like many government agencies, we're facing a retirement wave." Just this year, the Region IV and VI directors retired by their own choice, according to NCUA. In a separate review, Love said, the agency had determined that it needed to move its Region IV and VI offices because of the cost of the office in those locations and the pay differential for the areas. When the agency began discussing closing one of its regional offices, those two became natural targets. In the final decision, it was determined that to have two offices west of the Mississippi River was desirable and the California office had corporate experience. Therefore, in the end, NCUA decided to close Region IV as it currently exists and move Region VI's headquarters to Tempe, Ariz. In addition, trimming down from six to five regions provided the "best bang for the buck" and the least disruption to credit unions, Love said. However, some disruptions are anticipated with the transition, she said, such as credit unions sending items to the wrong regions or trying to call the closed or moved office. The agency has made a commitment to keep the process transparent for credit unions, Love stated. One way of managing this goal is that most credit unions will maintain the same examiners and supervisory examiners even though they may be transferred to a different region. The new regions are also working toward a reasonably seamless transfer of staff by having them meet with the new credit unions in their regions. Additionally, the agency is completing the transfer of regions without any reductions in force. Moving the Region VI office provided NCUA employees with the security of knowing they would have a job waiting for them in one of the realigned regions as per Office of Personnel Management rules. Though the agency could not grant every affected employee their first choice of transfer, many have gotten it. NCUA is still in the process of figuring out where everyone will go. Since Region VI is under a `transfer of function,' those employees have been handled first. According to Love, about 50% of Region VI employees will be moving with the office and the other half will be taking discontinued service retirement. Region IV is a different story. With the closure of an office, OPM does not require the agency to place the employees within the agency. "We basically could have closed the Chicago office and told everybody there, `if a vacancy comes up and you want to apply for it, you can compete for it with everybody else, and if you get the job great, and if not, it's been really nice having you here.' And we didn't say that. We said, everybody in this office gets a job offer, whether you're the receptionist, our Welfare-to-Work mom, or the regional director.We made the commitment that we're giving everybody a directed reassignment and so far, we had some people in the Region IV office that just didn't want to leave Chicago, so for them, obviously, we weren't able to give them an assignment of someplace they wanted to go," Love said. In the end, she estimated, about eight employees have decided to stick with the agency through the shifting, and another seven or eight are expected to be placed within NCUA. She said that probably three will retire and another three will find other jobs. Region IV's transition has a longer timeline to operate under OPM rules, she explained. As you can imagine, Love, the former Region IV Director was relieved to hear of her reassignment. "I was really happy when I got my assignment.Like all senior staff I serve pretty much at the pleasure of the board. They could very well have chosen to go a different route in filling the vacancies that came up with the retirements," she said. Former Region VI Director Bob Blatner retired earlier this year. Each region has between 25 and 32 employees, outside of examiners, though not all are physically located in the office. Those not in the regional headquarters are staying where they are but transferring their workload. The agency has already begun the reassignment process but most will occur Jan. 1, 2004. Region IV must remain open until April 3, 2004. Its responsibilities will be greatly reduced to just those credit unions in Wisconsin, because the agency must continue to have work assigned to the region until it is officially closed and the appropriate notices are distributed. Love said NCUA is also working to "interact compassionately" with staff and keep information flowing down to those affected by the realignment. "One of the things that we put into place fairly early on in the process was something that is called CTAP, Career Transition Assistance Program, and it's within the agency." As vacancies occur, staff in Region IV and Region VI will get first choice, which a number of people in Region IV did fairly early on. Also if employees are not interested in NCUA's directed assignment for them, but want another job in the government, they can go into Interagency Career Transition Assistance Program, which "helps them float to the top of the hiring/referral list in other government agencies," Love said. At the time of NCUA's announcement of the realignment, the agency forecast savings of $27 million over the next 10 years. Love said NCUA should have no problem meeting and exceeding that estimate. The agency should be able to reduce its number of full-time equivalents due to the economies of scale they will achieve. The "workload hasn't gone away, so we thought we would probably need the same number of `worker bees' in the other regions so we would be going down the management slots, but not necessarily the `worker bee' slots," she said. "What we're seeing, we're actually estimating that we'll be able to go down some of the actual analyst and technician slots, so we'll be able to have a higher FTE savings than what we originally thought." Some of the regions' workload is for internal matters, which will not need to be duplicated once the regions are cut back to five. Currently, Region IV has slightly more than 2,300 credit unions. Under the new plan, Love said, there will be between 2,500 and 3,500 credit unions per region, with most under 3,000. NCUA's 2004 budget will reflect the five-region configuration with a very small budget for Region IV, according to Love. The regions typically submit their initial requests in late August to early September though the regions have not received their instructions for the 2004 budget requests yet. The entire budget then usually goes to the November board meeting for approval, following a public budget briefing for the industry for the past two years. [email protected]

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