PORTLAND, Ore. (10/16/13)--The National Credit Union Administration's job is to help credit unions move forward, chairman Debbie Matz said in her keynote address at the Northwest Credit Union Association's Amplify Convention in Portland, Ore., last week.
The agency has taken significant steps to reduce the regulatory burden for credit unions, she said.
Matz, who kicked off the convention, said that she understands credit union concerns over rules and regulations. The NCUA is working hard on "getting to yes" rather than saying no "simply because we've always said no'" (Anthem Recap
That's why the NCUA seeks to make sure that the regulations it does create are effective, minimally burdensome and have no unintended consequences, she said.
But she said there would never be a point when credit unions felt that a burden did not exist, and the "healthy tension" between credit unions and the agency will always exist.
The NCUA will continue the Regulatory Modernization Initiative she started in 2011, Matz said, to look for ways to streamline some regulations and make others more understandable and easier to follow.
Among the concerns she cited was interest-rate risk. She urged credit unions to develop policies to address long-term, low-interest loans on their books and rate sensitivities in their deposits. If rates go up precipitously, she said, many credit unions without a plan "will not survive."
Matz also cited other risks credit unions must monitor, including:
- Third-party risks: Credit unions gain economies of scale from working with third-party vendors and credit union service organizations, but those relationships are not without risk and the NCUA is now looking at creating a CUSO registry. "Trust, but verify," Matz said.
- Cyber-security risks: Credit unions need to perform risk assessments, establish incident response programs and build in mitigation processes to address cyber-security threats, Matz said.
- Off-balance-sheet risks: Executive benefits and pension plans are higher-risk, non-compliant investments and credit unions need to make sure they are not taking on more than they can afford.
Also at the convention, NWCUA President/CEO Troy Stang shared his vision for the future of Northwest credit unions during the association's annual business meeting.
Stang described a marketplace in which credit unions are so relevant to consumers that they have "at least a majority share" of the financial services market. He measured that market share in terms of members, assets, loans and deposits, and community impact.
To help create that world, Stang said, the NWCUA will focus on three areas in 2014: policy advancement through effective advocacy; public awareness of the structure, value and impact of credit unions; and collective action by credit unions to build trusted communities, control competitive costs and broaden their sphere of influence.
The common thread in all three areas is making sure that lawmakers, regulators and the general public understand that credit unions are not just a part of the fabric of their communities, but the heartbeat, he said.