ALEXANDRIA, Va.-Even after having been a schoolteacher and state legislator, NCUA Chairman JoAnn Johnson stated that her first year as head of the agency has been the pinnacle of her career. "It's energizing for me. This past year has been the best year of my professional career in any of the positions that I've held," she said. "It's been gratifying to see accomplishments and helping set the direction and having the response of those who are affected by the regulation that we pass." Johnson added, "I love what I'm doing. I'm energized by it and being able to serve as chairman has been something I've appreciated very much, having the opportunity to help set the agenda, look forward. I really focus on trying to set a vision. Even after I leave, I'm hoping that some of the things we're putting in place will have long-lasting results. It's allowed me the opportunity to continue with my own personal drive to leave things better than you found them." Some may have been intimidated by following such a popular chairman as Dennis Dollar, but Johnson saw it as an opportunity. "Chairman Dollar was a terrific mentor for me. I feel like I was privileged to come in under his leadership. Remember, with the board only being allowed to have one credit union industry person on the board, I came in as a non-credit union person, so I had someone to really learn from as far as a lot of the credit union issues. I feel a sense that I received the baton from Chairman Dollar and I'm here to complete the race." And, Johnson was off and running in her first year with the risk-based capital baton that Dollar handed off when he left the agency. She said she feels her efforts at working with members of Congress, Treasury, and the credit union industry on the issue have been fruitful. "It's been a very gratifying experience to this point and I'm hopeful that we'll have a legitimate shot at actually getting it passed. [There's] a lot of enthusiasm, a lot of support." Earlier this year, the proposal was sent to legislators who sponsored the Credit Union Regulatory Improvements Act in the last Congress and will be included in the bill, expected to be introduced sometime in May or June. "We had very good meetings with Treasury. I believe we developed a good working relationship," Johnson explained. She has met with Treasury Secretary John Snow on the matter and hopes to meet with him again in the near future. "There's a lot of establishing relationships with the staff and with the members of Congress individually . and then using those to be able to defend the proposal. I believe that's gone very well," she said. CURIA has received endorsement from both sides of the aisle in Congress with nearly 70 lawmakers sponsoring the bill in the last session. "One thing that I'm especially pleased to be able to do is to reach across the aisle. The credit union industry has both supporters and, of course, detractors on both sides of the aisle. It's a bipartisan effort, or nonpartisan, and coming from a political background, I find that especially rewarding to reach across the aisle and have that support." A Capital Problem Johnson, a former junior high school football coach, has been tackling capital issues on the regulatory side as well. Stemming from NCUA's Capital Summit held late last year, she said she hopes to have a couple of proposals out in the next couple of months. Johnson plans to propose lowering the qualifying RegFlex capital threshold from 9% to 7%. "Now that we have issued our report to Congress and we're looking at reducing the leverage ratios from 7% to 5% to be well-capitalized, it only makes sense that we not hold credit unions to that artificially high level for RegFlex qualifications," she stated. "I hope this is something that we can move ahead on right now." the chairman added. "We've had it for a couple years and we have experience with it now. We feel confidently that we can move from 9% to 7% and not have to wait on the other proposal legislatively. It's artificially high right now." Johnson is also looking forward to a proposal to permit "low-income credit unions to return the secondary capital at their discretion." Currently they have to hold onto the capital for a certain period of time and it eventually counts against them. Another pet project of Johnson's has been modernizing field of membership regulations. With credit union membership growth declining, it is particularly important at this point for credit unions to look to diversify their memberships. "I know field of membership issues are critical to a credit union's ability to serve," she said. "Diversification and membership growth opportunities are necessary for maintaining safety and soundness of a credit union. When a credit union applies to NCUA for a FOM change, whether to serve a community, an underserved area, or a TIP (trade, industry, profession), each application is evaluated on its own merits. I will not waiver on the flexibility established in the field of membership rules, which are consistent with the Federal Credit Union Act. Recognizing the rapidly changing financial marketplace, I support keeping the field of membership rules modernized and will continue to support the flexibility needed within the bounds of the law and regulations." Bankers Never Quit These two projects, and numerous others, have kept the banking industry crying foul and accusing NCUA of continuing its "cheerleader" role. Johnson is not concerned. "My job is too ensure that credit unions are safe and sound and that they're acting within the guidelines of the regulation and within the statute," she reasoned. "As a regulator, I have the opportunity, through regulation, to provide guidelines that allow them to either work with some flexibility or to have those burdensome regulations reduced. If credit unions do well by that, that's wonderful. If credit unions are doing well, then I, as a regulator, am doing well. I don't believe that's cheerleading; that's doing your work and I believe that's what Congress wants as well." Johnson pointed out that the agency hears from the banking industry on nearly every regulation it puts out, including member business lending issues and most recently CUNA Mutual's securitization pilot program. She said it is ironic that part of the reason credit unions were started was to make agriculture loans, yet years later H.R. 1151 imposed a cap on such loans with its business lending restrictions. So what is doing her job according to Johnson? She wants to see an agency that has helped the credit union industry improve itself. She wants to see an efficient agency that removes unnecessary, burdensome regulation. "I didn't come in with an agenda and I'm not here to boost my own ego," Johnson stated. "I'm not looking for a position down the road. I'm here to do the best job I can while I'm here." Johnson's chairmanship has been marked by a unique scenario that could have proven frustrating. There have been only two board members-of different political parties-ever since Dollar left the board a year ago. "I think on those underlying safety and soundness issues and wanting credit unions to do well, we're very much in sync. Board Member Matz and I have a good working relationship," Johnson stressed. "Certainly, there are times when we have philosophical differences or we approach things perhaps a little differently, but overall I would say that we have worked well over the last year." When asked whether some things she would like to accomplish have been held up because she and Matz are not in agreement, she said, "I don't know whether I'd go that far." As far as the status of the third board member, Johnson echoes what has become the empty seat's anthem: sooner rather than later. But even with Dollar, a fellow Republican, on the board, Johnson said she made compromises to work things out between the three. "[W]e were able to work out differences and work together very well," she said. "I think that's healthy. I think the advantage of having the third member come to the board is that, whenever you have the opportunity to have another viewpoint and to expand the discussion, I think that's always a favorable situation." [email protected]