ALEXANDRIA, Va.-Responses to NCUA's request for comment on its modest means and executive compensation data collection effort raise a number of points, according to comment letters the agency received. American Airlines Federal Credit Union CEO John Tippets questioned a number of aspects of the process. First, NCUA would have to take into account changes in membership due to charter conversions. "The process would need to take into account charter conversion among federal credit unions and include some form of time-adjusted seasoning expectation.With many new community charter conversions and underserved area expansions in recent years, we assume in many cases membership of those credit unions may be relatively unchanged from the credit unions' historical occupational profile(s)," he wrote. American Airlines FCU was a single sponsor credit union until the industry was hit hard by 9-11 and the credit union converted to a TIP charter a couple years ago. Tippets suggested the definition of modest means include: working Americans within the fields of membership the credit unions were originally chartered to serve; a broad economic spectrum of low- and middle-income households; Americans coping with losses and reductions of income, including employer bankruptcies, unusual medical expenses and others; and retirees on a fixed income. Lack of a broad definition might create "reputation risk," he said. He also expressed reservations about NCUA's ability to comprehend and analyze the information properly. "NCUA needs to make sure it has the proper expertise, both in collecting the data and analyzing it. Otherwise, the results of the collection will be of little use and subject to significant criticism," Tippets said. He pointed to a recent field of membership case where, he said, NCUA was found to lack the expertise to determine whether a `community' was `local.' Tippets also recommended: * including all credit unions adopting underserved areas to answer GAO's question of whether the potential members in these areas actually do gain greater access; * looking into all wealth-building products in addition to loans; * credit unions receive advance notice to produce meaningful data; * NCUA address data security concerns; and * permitting consumers to opt-out of the data collection if NCUA expands the effort. In addition, he said that executive compensation should be handled as a separate process. CUNA and NAFCU also expressed concerns about the data collection process in their comment letters, including NCUA's estimated time burden of one hour for the credit union to gather the information. Both also urged NCUA to dig a little deeper in its data collecting. The American Bankers Association was pleased with NCUA's first step toward data collection on credit union service to those of modest means. "As NCUA undertakes this effort, it is important that it be done in a manner that assures the highest quality and most complete information," ABA Chief Economist Keith Leggett wrote. "In particular, the NCUA should over-sample large credit unions and include the 100 largest federal credit unions in its sample. These institutions possess the bulk of credit union members and assets and have exhibited the strongest growth within the credit union industry." It has been the bankers' contention that larger, `morphed' credit unions are especially likely to abandon their mission. He continued, "As the Federal Credit Union Act clearly points out, credit unions have a mandate to serve people of modest means. This is the rationale for the tax exemption and other federal benefits extended to credit unions." Leggett called the survey a "positive development." He did criticize the aggregation of the data to be collected. "In fact, aggregated data lacks transparency and seems to undermine the purpose of collecting this information – that is to improve corporate governance at federal credit unions. ABA recommends that NCUA require federal credit unions to disclose annually the compensation and benefits of the top three senior managers on the Form 5300." Leggett concluded, "This information should be publicly available so that taxpayers can ascertain the value of the tax expenditure provided." -

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