ALEXANDRIA, Va.-Even after having been a schoolteacher and statelegislator, NCUA Chairman JoAnn Johnson stated that her first yearas head of the agency has been the pinnacle of her career. "It'senergizing for me. This past year has been the best year of myprofessional career in any of the positions that I've held," shesaid. "It's been gratifying to see accomplishments and helping setthe direction and having the response of those who are affected bythe regulation that we pass." Johnson added, "I love what I'mdoing. I'm energized by it and being able to serve as chairman hasbeen something I've appreciated very much, having the opportunityto help set the agenda, look forward. I really focus on trying toset a vision. Even after I leave, I'm hoping that some of thethings we're putting in place will have long-lasting results. It'sallowed me the opportunity to continue with my own personal driveto leave things better than you found them." Some may have beenintimidated by following such a popular chairman as Dennis Dollar,but Johnson saw it as an opportunity. "Chairman Dollar was aterrific mentor for me. I feel like I was privileged to come inunder his leadership. Remember, with the board only being allowedto have one credit union industry person on the board, I came in asa non-credit union person, so I had someone to really learn from asfar as a lot of the credit union issues. I feel a sense that Ireceived the baton from Chairman Dollar and I'm here to completethe race." And, Johnson was off and running in her first year withthe risk-based capital baton that Dollar handed off when he leftthe agency. She said she feels her efforts at working with membersof Congress, Treasury, and the credit union industry on the issuehave been fruitful. "It's been a very gratifying experience to thispoint and I'm hopeful that we'll have a legitimate shot at actuallygetting it passed. [There's] a lot of enthusiasm, a lot ofsupport." Earlier this year, the proposal was sent to legislatorswho sponsored the Credit Union Regulatory Improvements Act in thelast Congress and will be included in the bill, expected to beintroduced sometime in May or June. "We had very good meetings withTreasury. I believe we developed a good working relationship,"Johnson explained. She has met with Treasury Secretary John Snow onthe matter and hopes to meet with him again in the near future."There's a lot of establishing relationships with the staff andwith the members of Congress individually . and then using those tobe able to defend the proposal. I believe that's gone very well,"she said. CURIA has received endorsement from both sides of theaisle in Congress with nearly 70 lawmakers sponsoring the bill inthe last session. "One thing that I'm especially pleased to be ableto do is to reach across the aisle. The credit union industry hasboth supporters and, of course, detractors on both sides of theaisle. It's a bipartisan effort, or nonpartisan, and coming from apolitical background, I find that especially rewarding to reachacross the aisle and have that support." A Capital Problem Johnson,a former junior high school football coach, has been tacklingcapital issues on the regulatory side as well. Stemming from NCUA'sCapital Summit held late last year, she said she hopes to have acouple of proposals out in the next couple of months. Johnson plansto propose lowering the qualifying RegFlex capital threshold from9% to 7%. "Now that we have issued our report to Congress and we'relooking at reducing the leverage ratios from 7% to 5% to bewell-capitalized, it only makes sense that we not hold creditunions to that artificially high level for RegFlex qualifications,"she stated. "I hope this is something that we can move ahead onright now." the chairman added. "We've had it for a couple yearsand we have experience with it now. We feel confidently that we canmove from 9% to 7% and not have to wait on the other proposallegislatively. It's artificially high right now." Johnson is alsolooking forward to a proposal to permit "low-income credit unionsto return the secondary capital at their discretion." Currentlythey have to hold onto the capital for a certain period of time andit eventually counts against them. Another pet project of Johnson'shas been modernizing field of membership regulations. With creditunion membership growth declining, it is particularly important atthis point for credit unions to look to diversify theirmemberships. "I know field of membership issues are critical to acredit union's ability to serve," she said. "Diversification andmembership growth opportunities are necessary for maintainingsafety and soundness of a credit union. When a credit union appliesto NCUA for a FOM change, whether to serve a community, anunderserved area, or a TIP (trade, industry, profession), eachapplication is evaluated on its own merits. I will not waiver onthe flexibility established in the field of membership rules, whichare consistent with the Federal Credit Union Act. Recognizing therapidly changing financial marketplace, I support keeping the fieldof membership rules modernized and will continue to support theflexibility needed within the bounds of the law and regulations."Bankers Never Quit These two projects, and numerous others, havekept the banking industry crying foul and accusing NCUA ofcontinuing its "cheerleader" role. Johnson is not concerned. "Myjob is too ensure that credit unions are safe and sound and thatthey're acting within the guidelines of the regulation and withinthe statute," she reasoned. "As a regulator, I have theopportunity, through regulation, to provide guidelines that allowthem to either work with some flexibility or to have thoseburdensome regulations reduced. If credit unions do well by that,that's wonderful. If credit unions are doing well, then I, as aregulator, am doing well. I don't believe that's cheerleading;that's doing your work and I believe that's what Congress wants aswell." Johnson pointed out that the agency hears from the bankingindustry on nearly every regulation it puts out, including memberbusiness lending issues and most recently CUNA Mutual'ssecuritization pilot program. She said it is ironic that part ofthe reason credit unions were started was to make agricultureloans, yet years later H.R. 1151 imposed a cap on such loans withits business lending restrictions. So what is doing her jobaccording to Johnson? She wants to see an agency that has helpedthe credit union industry improve itself. She wants to see anefficient agency that removes unnecessary, burdensome regulation."I didn't come in with an agenda and I'm not here to boost my ownego," Johnson stated. "I'm not looking for a position down theroad. I'm here to do the best job I can while I'm here." Johnson'schairmanship has been marked by a unique scenario that could haveproven frustrating. There have been only two board members-ofdifferent political parties-ever since Dollar left the board a yearago. "I think on those underlying safety and soundness issues andwanting credit unions to do well, we're very much in sync. BoardMember Matz and I have a good working relationship," Johnsonstressed. "Certainly, there are times when we have philosophicaldifferences or we approach things perhaps a little differently, butoverall I would say that we have worked well over the last year."When asked whether some things she would like to accomplish havebeen 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 thethird board member, Johnson echoes what has become the empty seat'santhem: sooner rather than later. But even with Dollar, a fellowRepublican, on the board, Johnson said she made compromises to workthings out between the three. "[W]e were able to work outdifferences and work together very well," she said. "I think that'shealthy. I think the advantage of having the third member come tothe board is that, whenever you have the opportunity to haveanother viewpoint and to expand the discussion, I think that'salways a favorable situation." [email protected]