The NCUA is making efforts to streamline that can often gounnoticed when so many other compliance issues have been hittingcredit unions. Some, such as Dodd-Frank requirements, are beyondthe agency's control. Others like the CUSO and participations rules are seemingly in perpetual limbo, lurkingin a corner for a year or more.

The NCUA made it easier for low-income credit unions to becomebusiness lenders as part of the Obama administration's effortsfor drought relief and expanded the definition of a fleet for the purposes of business vehicle loans.

In one of its most recent moves, the agency's Office of SmallCredit Union Initiatives reached out to small credit unions that were still filing their 5300 CallReports manually and offered to buy them computers. The computerswere nothing fancy, just IBM T500 laptops purchased after the NCUAexaminers' lease contract was to be renewed. The machines came outin 2008 and sell for around $350 used. The NCUA is also offeringtraining and support. Fourteen credit unions took the deal.

Myers explained that these credit unions took the NCUA up on itsoffer, and four others that qualified for low-income credit unionreimbursement grants bought their own computers.

Myers also pointed out that Bank Secrecy Act filings must befiled online as of May, but that small credit unions received anextension to May 2013. Internally, the NCUA is floating a date forending paper filing of 5300 Call Reports as well, though it's notbeen made public yet.

The initial outlay isn't huge and in the next year or so thedirect expense to the agency will likely end up paid for, accordingto Bill Myer, head of the NCUA's OSCUI, because of the ability tofile electronically and greater consistency in reporting.

Yes, some credit unions still pull out the old ledger books andgreen eyeshades and handwrite figures in. The credit unions thatreceived the computer donations ranged from $53,000 in assets tonearly $10 million in assets. It's difficult to believe that acredit union of any size doesn't have a computer, and even moredifficult to fathom how a $10 million operation runs efficientlywhen entries are being done manually.

Truth is it's wasteful of their members' resources as well asthe NCUA's, which are funded by all federally insured creditunions. If a credit union files on paper, its examiner then has tospend the time doing the data entry and if there are errors in thedata, it means a phone call or two to the credit union tostraighten it out.

One anonymous commenter to CUTimes.com supported assistance to smaller credit unions butdecried the redistribution of wealth without oversight. The agencyis tasked with keeping the entire industry safe, and it's mucheasier and less time consuming to do that with electronic records.The NCUA was already redistributing the wealth by poring over paperlogs–or in some cases doing the credit unions' books for them. Thiscomputer give-away is actually a cost savings.

Myers said the only criteria for receiving the laptops were thatthe credit union was small and did not already file electronically.There were no financial health requirements. I took a sampling ofthe 14 credit unions receiving the laptops: the smallest, thelargest and one in the middle of about $1.5 million.

The $10 million credit union appeared relatively healthy with apositive net income, reporting 0% delinquencies and 21% capital.Why can't a $10 million credit union with 21% capital afford acomputer? About half of loans were in mortgages, and no indirectloans or participations reported, which can be considered morerisky than others, to justify the extra capital cushion.

The smallest credit union had just $53,000 in assets. It hadjust $8,500 loaned out, primarily in unsecured loans. Afterreporting 30% delinquencies in Sept 2011, it reported 0% for thelast two quarters. At that small a credit union, it could just bethat one member caught up on their payments.

However, it also had negative net income over the last threequarters. The credit union's capital was 29% and climbing, but ROAwas a negative 10.75%. Again, you see an incredibly high capitalratio held against very little risk–other than missedopportunities. Perhaps the members would be better served bykeeping the books electronically so the credit union could bettertrack all the moving pieces of its business. This is a truly smallcredit union and the computer would account for roughly one-thirdof its net worth.

Another credit union that received one of the donated computersalso had negative net income for the past five quarters, and networth dropped from 18% a year ago to 17%. Loan delinquencies were2.8% and climbing over the last year though still half of its peergroup. ROA was negative but still not as low as its peer group. Theshining light for this credit union might be its positivemembership growth over the first half of 2012 despite its 87%market penetration.

However, if the credit union is losing money, the biggerquestion is whether the NCUA is throwing good money after bad.