Data Collection Issue: CUNA Gets it, NAFCU Doesn't
It's here. After months of discussion (even years if you think back to former NCUA Board member Yolanda Wheat's Community Action Plan), the credit union industry is facing a data collection initiative by NCUA that is aimed at showing how credit unoins serve the underserved. Largely in response to the...
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It’s here. After months of discussion (even years if you think back to former NCUA Board member Yolanda Wheat’s Community Action Plan), the credit union industry is facing a data collection initiative by NCUA that is aimed at showing how credit unoins serve the underserved. Largely in response to the House Ways and Means Committee hearing last November -where Congress showed a pointed interest in how credit unions serve those of modest means – NCUA informed credit unions that it will begin collecting two types of data. The first will profile credit union membership to try and get a sense of who they are serving and how they are serving them. NCUA will also be collecting credit union executive compensation data. There are two ways to look at this. The first is “about time.” NCUA, like the rest of the industry, has heard Congress loud and clear and is stepping up to try and document how credit unions are serving the underserved. This is the camp I fall into. It’s time for credit unions to produce proof. If successful, the obvious benefit is it is a ready-made defense against bankers and their claims that credit unions aren’t fulfilling their mission and should be taxed. Credit unions would be able to squash that entire argument like a bug by having proof in hand. The other way to look at it this is “uh oh.” Those feeling this way might be wary of the formula NCUA is using or worse may think it will expose credit unions for not doing enough to serve the underserved. To those I say, tough luck. It’s put up or shut up time. You have to be confident in the industry and what it does for members. While not perfect, NCUA’s collection will surely show some kind of proof of service to the underserved. CUNA and NAFCU viewed the news very differently. CUNA publicly supported it, saying it’s clear that Congress wants to see proof and it will work with NCUA to ensure they are doing enough to get it. It was an overall positive reception from CUNA. NAFCU, on the other hand, wasn’t happy. It said that NCUA’s data collection program may not be adequate to provide a profile of credit union membership. It is concerned that the AIRES share and loan data, one collection method NCUA is using, isn’t thorough enough to paint a complete picture. Why would NAFCU react like this? I don’t get it. Either NAFCU thinks the collection system is woefully inadequate and won’t show all that credit unions do for the underserved, or it’s trying to move away from CUNA on this issue. NAFCU over the years has taken pride in zigging when CUNA is zagging on things it has a passion for. Bankruptcy reform comes to mind. But either way, the rules of PR and politics say you must publicly support this proposal, whether you think the collection methods are perfect or not. It’s time to show a united front. Time to show Congress, the bankers, and everyone else that credit unions are ready to walk the walk and talk the talk. Don’t publicly bring up collection method flaws right off the bat. It’s a whiney approach that isn’t necessary at this stage. Work with NCUA behind the scenes. Let NCUA know what you’re thinking – behind closed doors. Besides, NCUA even couched its announcement by saying “it is likely NCUA will determine that additional or different data should be collected from a larger number of credit unions to allow for a valid statistical analysis..” There you go NAFCU, the door is obviously still open, don’t rock the political boat by immediately opposing this effort. Not to mention, NCUA has given very vague information on exactly what its examiners will be asking and collecting. We don’t even know the whole story yet. I know NAFCU’s heart is in the right place. They want to make sure credit unions shine. They want Congress to get the complete picture of how credit unions serve the underserved. That’s understandable, but you can’t fire on the first proposal by NCUA just because it isn’t perfect. And sorry to say NAFCU, I don’t think there is a silver bullet to data collection. Data isn’t going to show how a credit union helped a single parent get a low-rate car loan so they could drive to a new job. It won’t show how a credit union was able to counsel a member to transfer their high-rate credit card balance to a home equity loan so they have more money to pay down debt. These are credit unions’ individual stories and they are the ones who have to tell them. This isn’t a perfect scenario, but it is what it is. I think the industry has to embrace this collection effort and along the way suggest ways to improve it. As for the executive compensation collection, that is a reaction to some high-profile cases of non-profit CEOs in other industries being paid millions. I think credit unions will be fine there, but the data will be great fodder for credit union boards and executives who can now see official data on just what executives are making. If Congress is so concerned about excessive compensation of credit union execs, they should come down on the credit union directors and CEOs who convert to a bank charter so they can line their pockets with members’ money. -
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