I am extremely pleased with the significant progress NCUA has made in the area of addressing credit union capital and prompt corrective action issues for federal credit unions. In October, NCUA held the Summit of Credit Union Capital which allowed great progress in opening dialogue on the issues and exploring opportunities to enhance the capital structure. My proposal includes lowering the RegFlex qualifying net worth ratio from 9% to 7% for well-managed, well-capitalized natural person credit unions. Also, to pursue risk-based capital for the corporate credit union system. While moving to a risk-based system for all natural person credit unions will require a statutory change, these are areas where it may be possible to make improvements in credit union capital without the need for legislative change. In another important area, we have organized a working group comprised of credit union officials and NCUA staff to explore opportunities to make the examination process of community development credit unions more effective, not excessive. I have proposed that well-managed, highly-rated low-income credit unions have the option to release the portion of a secondary capital account that no longer counts as net worth. The wise use of NCUA's resources is a vital element to maintain a well-managed, and an accountable federal regulator and insurer for credit unions. I am pleased with the budget process we accomplished as we enter 2005. The NCUA Board decreased the budget, provided a refund to federal credit unions, and reduced the overhead transfer rate to 57%. 2004 is expected to be another record-setting year for America's credit unions in the adoption of underserved areas across America. These credit unions are providing access for millions of Americans who otherwise would be left behind to unscrupulous and predatory lenders. NCUA's Access Across America Economic Empowerment Summits produced great results in providing credit unions with information resource sharing focused on financial education, homeownership, and member business lending across the United States. JoAnn Johnson NCUA Chairman Alexandria, Va.