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ALEXANDRIA, Va. – After 14 years of serving the credit union industry, NCUA Board Member Gigi Hyland refers to herself as “a true believer” that credit unions are serving the American public well. “We’ve always had trouble with telling our story and telling our story in a way that clicks with a variety of audiences,” Hyland commented. The Nov. 3 Ways and Means Committee hearing should serve as a wake up call to the agency and credit unions to be more effective communicators. “The committee made clear what their concerns are. I think NCUA needs to take those concerns seriously,” Hyland said. “I can think of a number of credit unions doing great work,” she commented, adding that NCUA’s response must be balanced without downplaying the issues raised at the hearing or overreacting. “We have to be thoughtful and deliberate in our reaction to it.” The taskforce is “striving mightily” to come up with a response, she said, which will hopefully be out early in 2006. Hyland continued, “Some sort of response…is going to be needed. What form that takes is up for debate.” She said credit unions must be made aware of the importance of the message they should be sending “without scaring credit unions that CRA is down the pike.” “It’s also important to look at the issue of modest means as a large one,” Hyland added. “It can be interpreted differently by different people.” The banking industry often cites Home Mortgage Disclosure Act data depicting themselves ahead of credit unions on serving the mortgage needs of the low-income community and minorities. However, Hyland questioned, “Do the numbers necessarily reflect what’s going on within a credit union?” She pointed out that institutions under $35 million in assets-which captures a lot of credit unions-do not report HMDA data. Hyland asserted that the credit union tax-exemption is clearly founded on two aspects: the cooperative and democratic nature of credit unions and service to those of modest means. When asked about a legislative proposal from America’s Community Bankers to permit only those credit unions with 75% of deposits coming from people of modest means, Hyland said it would be great if credit unions could do that, but they need members from across the financial services spectrum to be successful and safe and sound. She did not think the numbers would work. The American Bankers Association has filed a lawsuit in Utah to limit America First Federal Credit Union’s adoption of underserved areas, similar to the community charter the agency granted and was forced to repeal. A suit was filed simultaneously in Pennsylvania over the agency’s approval of a community charter field of membership. On these, Hyland stated, in accordance with NCUA regulations and the Federal Credit Union Act, “Every person in America should have the opportunity to join a credit union.” Hyland was working at her family’s law firm and counseling credit unions on field of membership issues at the time the AT&T Family Federal Credit Union field of membership case went to the U.S. Supreme Court. The bankers were certainly working overtime then, but right now is the most consistently ramped up their efforts have been. NCUA’s role in all of the action, she said, is “The agency is charged with ensuring the credit union system is vital, is vibrant, and, most importantly, is safe and sound.” As Hyland commented, the issue of getting out the word on credit unions’ good deeds is critical, and, for her part, the new board member will begin by listening to credit unions on how to tackle that and other issues. “Though I’ve been in the credit union system for 14 years, eight of those were in corporates,” she pointed out. Hyland said she is really interested in getting the perspective of the natural person credit unions. A top regulatory issue on credit unions’ minds is Bank Secrecy Act requirements. “BSA is an issue I worked on fairly extensively at Empire [Corporate Federal Credit Union].The practical application of the law is a lot harder to do than the law on its face,” Hyland said. The regulator acknowledged the gray area on what is suspicious activity and what is not. “BSA will continue to be a challenge, bottom line,” she concluded, noting that it will also continue to be of increased importance. Risk-based capital is another top priority for natural person credit unions as well as corporates. With just a regulatory change needed, corporates are probably closer to a risk-based framework than natural person credit unions, which will require a statutory change currently included in the Credit Union Regulatory Improvements Act (H.R. 2317). However, Hyland remarked that the corporate model might not necessarily be the best for natural person credit unions because, as wholesale institutions, the capital percentages for corporate credit unions may not apply to others. No matter the issue, though, Hyland said, “I’d like to be known as a regulator who is thoughtful, who listens to all sides, and is also fair.” She wants to allow for regulatory flexibility while “making sure credit unions stay on a safe and sound track.” However, in-person meetings with the nationwide network of credit unions has been put on hold for a while until Hyland’s broken ankle and leg heal. She does plan to set up teleconferences and Webinars with various officials within the national community in the meantime. Hyland does plan to go to New York for the holidays to spend them with her fianc’s family. “One of my greatest joys is to cook a gourmet meal and sit down and eat with friends and family,” she said. Cooking is in her blood, coming from her mother and grandmother. Hyland is engaged to Chris Revere, formerly a lobbyist with the New York State Credit Union League and now with an independent firm in Albany, but no date is set at this point for their wedding. For now, the couple and their black lab are splitting their time between New York and Hyland’s Northern Virginia home, which she has kept from her days at the Association of Corporate Credit Unions and her family’s law firm. -

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