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Hyland Collaboration is road to the future
WASHINGTON (3/3/11)--National Credit Union Administration (NCUA) board member Gigi Hyland Wednesday said if economic recovery is to be fully achieved by credit unions, they need to “look for more avenues of growth through collaborative business models.”
Click to view larger imageNCUA board member Gigi Hyland discusses the road to the credit union future, which she says prominently features collaborative efforts among credit unions. (CUNA Photo)
“The credit union movement is still about the people,” she said during her address to the Credit Union National Association’s Governmental Affairs Conference here. “Your power is in mutuality, cooperation, and collaboration,” she said, underscoring that she believes the “bright future” of the credit union movement “resides in collaboration.” Hyland also noted that she believes that the NCUA should not take a regulatory stance that pushes credit unions to be “completely risk averse.” "We need to focus on making sure that you are managing that risk" properly, but not stifling service to members, she said. "(The NCUA) can't waiver from its regulatory responsibilities" of protecting safety and soundness, Hyland said, "but we have to make sure the pendulum does not swing too far" to one side or the other of the risk equation. Hyland, an NCUA member since November 2005, said that going forward “there must be capital reform” for credit unions, both in the form of prompt corrective action (PCA) changes and in pursuing authority for supplemental sources of capital. She said PCA rules should move away from the current approach that can be categorized as a “one-size-fits-all” rule. Hyland also backed the idea of an NCUA review of the definition of a small credit union, set at $1 million in assets in 1997 and updated to $10 million in 2003. She noted that in 2003, the $10 million cutoff represented 54% of credit unions. Hyland suggested that $50 million might be a more realistic threshold now. “The world had changed a lot” since 2003, Hyland remarked, and she suggested it is now time for the agency to study if a new definition of small credit union is in order as a means to increase regulatory flexibility for more institutions. Noting that it is her idea and not necessarily representative of her agency, Hyland said she also favors an idea fostered by Sen. Mark Warner (D-Va.), which promotes a regulatory “Pay Go” plan. Under the plan, a regulatory agency would have to eliminate one regulation for every regulation added to reduce the burden of cumbersome and duplicative rules. Hyland reminded her credit union audience of her agency’s long-term efforts to reduce regulatory burden by reviewing one-third of its regulations each year to eliminate redundant or outdated rules.
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