It takes two to tango, two to play catch, two to carry a canoe and two to hold a conversation. Two is not a large number but two working together can accomplish a lot.

At the NCUA, it takes only two to pass a regulation that will impact an entire financial services industry. It takes only two to pass a budget that must be paid for by all federally chartered and federally insured credit unions. And it takes only two to set the course of an industry and how it does business for years to come.

The two we are talking about that carry such weight and significance are the votes of two of the three NCUA board members.

The position of power at the NCUA is vested in the chair. Whoever is sitting as the chairman is the person in control. That person is responsible for the day to day activities of the agency, is the spokesperson, sets the agenda for the monthly board meeting, decides which rules will be considered for change and what those changes will be, determines what new rules will be proposed and how they will read, and which rules will actually be presented to the board for a vote and when that will be. It is a powerful position but it is only one person and hence only one vote.

And since NCUA is a three person board, in order to move a rule or agenda forward, it takes two.

Throughout the history of NCUA there have been many types of alliances formed to secure the magic number two. Often times it is the two members of the same political party that join together to achieve the needed number. If there is a power struggle between those two or if some reason their personalities clash, the minority party member may be enticed to go along with the chairman and cast the deciding second vote.

For one to become two, the chairman can employ various methods of addition. A proposed rule can be modified or changed to the liking of the second vote. A budget line item may be increased or decreased. A promise to help achieve one of number two's pet projects may be made or as in one case, many years ago, a chairman engineered the appointment of the member of the opposite party as vice chairman in order to secure a second vote for his agenda.

So there are many ways for one to become two. At NCUA it is fascinating to watch how the math works, what offers of enticement are made, whose philosophy will prevail and which second person is shown to have the greater muscle.

It's like a chess game. Each move is calculated to achieve an end result. You are always looking ahead trying to anticipate the other players' next move.

With major issues coming before the board in the next few months such as the annual budget, risk based capital and securitization, it will be interesting to watch the moves that will take place to get from one to two and who in the end will be able to say “check mate”.

Instant Insights /

Two: Can Set the Course of Industry

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