Johnson: I think the fact that we've been able to put the focus on the members has been invaluable. And we've done that through a number of the policies that we've worked through the last few years, whether that's been the conversion issue or private insurance or enforcing the bylaws. A number of ways, through regulation and through dedication to making sure that members' interests are put first. That's been highly important. I've been able to put a focus on financial literacy. First, being appointed to the federal commission on financial education and literacy allowed me to represent the agency in the process of finding a way to expand the delivery of financial education and to raise the awareness. I am so pleased that several credit unions have focused on the issue and taken it up as a priority. Other issues I have been pleased to be able have played a role in include revamping the member business lending rule and the letter we were able to do about 1% ROA and kind of guiding that through the process. That was extremely important to help credit unions manage to their specific needs. We were able to get credit unions into a better mind frame about using their capital for the long term.

CU Times: Obviously there have been some challenges during your tenure. Both related specifically to credit unions, such as litigation and things such as Hurricane Katrina. Other parts of the government were criticized after Katrina. How do you think NCUA and the credit unions handled it?

Johnson: Katrina was a really good test for the agency and the credit unions. We keep talking about the importance of having a plan in place and we had a contingency plan in place for ourselves. I think we did pretty well, and we also recognized some places where we can make improvements and we have done that. In subsequent circumstances, we've been able to test that and we know we were able to improve the system.

CU Times: Such as?

Johnson: Hurricane Rita followed Katrina, and we were able to respond more quickly in that circumstance. We learned about how to have our people in place more quickly and get in faster touch with the credit union management. We also learned a lot about shared branching and what an important role that played in the time of disasters so members could access their funds. We also used the disasters as an opportunity to push for direct deposit of government checks directly into accounts so they wouldn't have to worry if their credit union were underwater. Many of the improvements will help not just during disasters but in day to day operations. It also made disaster preparedness a reality. Sometimes you need that little kick in the pants to get the plans in place, and the industry responded very very well. I was also pleased to see how well credit unions helped one another. They jumped at the opportunity to share facilities, to share services, mobile branches, and to share supplies, not only for credit unions but their members and staffs. There was real outpouring of caring. It was real heartwarming to me.

CU Times: During your tenure, there were several times when the NCUA's decisions were second guessed or overruled, such as the recent court decision in ABA vs. NCUA. What do you think about how NCUA has fared in the courts, especially on the community charter issue, which has, shall we say, been controversial, especially in the eyes of the banks?

Johnson: It's unfortunate that resources have to be devoted to fend off some of these lawsuits, especially those pushed by the bankers. We've been successful in some and unsuccessful in others. But we have learned and in some of the subsequent cases that have come up, we've done a better job of ensuring that there is justification for the decision. And the standards are such that I think going forward credit unions can be sure that their fields of memberships that are granted are solid. Our documentation is much better than at the time that the field of membership expansion [in the case of Members 1st FCU, which triggered ABA vs. NCUA.] Credit unions can't serve members unless they have access. And we have worked hard to expand that access, especially for the underserved who are in need of financial services. I will continue working for that until the day I die; I think it's so critical.

CU Times: What did you know about credit unions when you were a state legislator before you came to NCUA? How have your perceptions and impressions changed? Were you a member?

Johnson: Actually, no. I first became acquainted with credit unions when I ran for the Iowa Senate in 1994, and the Iowa Credit Union League asked to meet with me after I had announced my candidacy. They asked me to sit down and talk about credit union issues, they didn't ask me to support any viewpoint, it was purely educational and frankly I liked what I heard. That was the beginning of my credit union education. Then I was fortunate enough to chair two committees–the Ways and Means Committee for four years and the Commerce Committee after that–and in both those positions I had the chance to work on financial institutions legislation. So that's where I got my in-depth knowledge but it actually started when the credit union league asked me to visit with them.

CU Times: What surprised you about credit unions or what has changed in your perception since you've been in the trenches?

Johnson: My view of credit unions hasn't changed since I first became acquainted with the industry, but it has deepened. I found that there is a deeper commitment on the staff and on the part of the industry itself than I ever anticipated. At the state level, I would hear from credit union members, constituents from my district, about issues and not always credit union issues. They would talk about other issues too–like hog lots–because they were involved. And I think credit union members were really interested in developing a relationship with their legislators, so they felt comfortable picking up the phone or sending an e-mail. I see the same thing now, only on a grander scale, in that members and credit union staffs are very interactive, they care about the member, and that's a good thing.

CU Times: Where was your district?

Johnson: The four counties west of Des Moines. I had rural and urban. I had the fastest growing urban district in the state.

CU Times: Were you aware of the intensity of the bank-credit union rivalry before you got to NCUA? What do you think of the rivalry? Are you optimistic about the future of credit unions since bankers are taking shots at them at almost every opportunity?

Johnson: I was aware of the rivalry at the state level. We had the same type of activity at that level. It's interesting. I actually passed more bank than credit union legislation at the time that I was chairman. I think there's room for both. That's always been my philosophy and will always be my philosophy. It's ironic, that credit unions have 6% of the assets in the country, and they are such a focus of attention for the banks. But credit unions have helped keep fees down and put pressure on banks to do that, and this has benefited all consumers, not just credit union members. It's unfortunate that banks spend all this money to continually attack credit unions and credit unions have to spend all this money to hold their position.

CU Times: Trade groups and credit unions are always writing you about the burdens of excessive regulation and as a member of the party that has been the party of less regulation, how do you strike a balance? How have your views changed since you've been a regulator?

Johnson: I found it is sometimes more difficult to implement the legislation than it is to make the law. Implementing it so it is effective, rather than excessive, is difficult. Credit unions need effective regulation that allows them flexibility to do well as a financial institution in order to do good. And by that I mean to do those things for their members, for the underserved and to do the people helping people things. They have to be healthy and safe and sound, but you can't overburden them with regulation so they don't have time or ability to do good for their members. Good regulation is necessary. I never felt you had to do a lot of regulations to be effective. We had some meetings with only one item on the agenda. We try to be measured, though sometimes we had to put out a regulation in response to some activity. We didn't ask for the problem. The conversion issue is a good example. That was never on an agenda or something I wanted to address but when it is put on your plate, you have an obligation to address it.

CU Times: What aspect of that issue was the most troubling?

Johnson: The fact that in certain circumstances if you look at the entire picture, the conversion wasn't being approached with the members' best interest in mind. It became obvious in certain circumstances that the personal interests of the insiders were overriding the interests of the members. The other thing that was disturbing was the lack of integrity of some of the votes themselves…About where the ballots were counted and where they ended up. To me that's very abhorrent, when I think of how precious the vote is. We also worked hard to see to it that the disclosure language was very clear and members knew what they were voting on.

CU Times: Anything you'd change about the regulatory system?

Johnson: Yes. I would move legislation more quickly. It's frustrating if you move legislation along but don't finish it during a two-year cycle, you have to start again. I'd put a burr under Congress' saddle.

CU Times: What's next for you?

Johnson: I am going back to Iowa and will explore my options. I know I am going back to two new grandchildren–twins a boy and a girl. And my daughter's getting married in the middle of August.

CU Times: Do you want to run for something else?

Johnson: You never shut the door, but I wouldn't say that's at the top of my list right now.

CU Times: Anything you might have done differently with the benefit of hindsight?

Johnson: No major changes. I always tried to view each issue objectively and keep the member in mind. I tried to be accessible and the door was always open. I always wanted to improve communication with the staff. We've become more forward looking and beefed up our technology. Though I wish more credit unions than the 25% who have signed up for NCUA Express.

CU Times: Was it a plus or minus not to be from the credit union world?

Johnson: I think it's unfortunate that NCUA is restricted to one member with credit union experience.

CU Times: Was there a steeper learning curve?

Johnson: Yes. But it depends on the individuals' willingness to study the issues. For me, it was like going to be college…I'll never know everything, I don't claim to. But I was always willing to learn.

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