A Question Worth Studying? It's The Last Thing Needed

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Still searching for that ideal gift for the person in your family who will graduate college this year? How about pointing them toward a career that can last their lifetime, and it's one of those swell government jobs, to boot?

Yes, I'm talking about the somewhat oxymoronically entitled Government Accountability Office (GAO) where, thanks to elected officials' inability to order off the lunch menu without doing a study first, there is always work to be had.

And not just a little bit of work, either. One person in the GAO's press office told me the agency currently has more than 1,000 studies in progress. In fact, if you're headed to Washington for CUNA's GAC, take a walk over to the Washington monument and try to get up good and close. There you will see, that's right, it's 555-foot structure is built completely out of government studies.

The financial services industry-read banks vs. credit unions-is doing its part. In the final month of 2005 one member of Congress, Rep. Jeb Hensarling of Texas, called for the GAO to investigate whether NCUA is stymieing credit unions seeking to become mutual savings banks, while two bank trade groups demanded another investigation of NCUA, this time to settle whether the agency is understaffed and as such poses a safety and soundness risk. In the case of the former, there may never be a better example of how money influences politics, as Texas is home to two billion-dollar CUs that have become banks. In the case of the latter, well, the bank groups excel at nothing if not creating bonfires out of packs of matches.

If GAO moves forward with the study of whether NCUA is standing in the way of more credit unions converting to banks, it won't be the first time credit unions have been the subject of such studies. But according to one person who's been through the process with GAO, it will likely be the first time the study's analysts have ever been exposed to credit unions.

Jeff Taylor, senior economist with NAFCU, has been involved in several studies GAO has conducted when the trade group acted to provide information to agency staff during studies of corporate credit unions and secondary capital.

"They did not know very much about credit unions," recalled Taylor, "especially the corporates. They also realized that they did not know much. We had to go over the basics, such as what a share was. It was really Credit Unions 101. We gave them a lot of material."

If you want a good example of mission creep within government, you need look no further than GAO's own description of its mission, in which it describes itself as an "independent, nonpartisan agency that works for Congress. GAO is often called the 'congressional watchdog' because it investigates how the federal government spends taxpayer dollars."

NCUA is indeed a federal agency, but its funded by credit unions and earnings from the NCUSIF (which, should it ever fail, does have the full faith and credit of the U.S. government, which is how I suppose they arrived at meeting the "spends taxpayer dollars" criterion).

GAO also stresses that it provides "nonpartisan" analysis, but as absolutely everyone inside the Beltway knows, there is very little of that in practice, in part because even if the study strives to be nonpartisan, it was likely partisan politics that led to a member of Congress requesting the study. "There's always some sort of political agenda," noted Taylor. "A congressman just might not say, 'Would you find something bad about credit unions?' If there's a movement afoot, GAO usually tries to figure out whether they should support it. But there are usually a lot of forces at work, from the Hill, from Treasury."

With more than a thousand studies being churned out of GAO every year, it begs the question of what becomes of all that work? Given the time between when an issue develops, a congressman finally takes notice, and GAO finally completes its study, the findings are all but dust-covered by the time they roll off the government's presses. Their only life from that point on is to be cited by the congressman who requested the study in the first place, providing him or her with political cover so they can appear to have taken "action!"

Does anything of any real value ever come out of all these studies? In true Washington form, Taylor says yes and no-it depends on where you look. "It's usually not anything meaningful and they don't typically ferret out anything new," he said. "You can find some stuff around the edges. The key findings won't knock your socks off, but that may be because we're in the credit union movement" and know much of what the studies include.

GAO, which has been around since 1921 when it began its life as the General Accounting Office, says its role is also to ensure that "government programs are meeting their objectives or providing good service to the public." Someone should get out the Hi-Liter and ask Rep. Hensarling to explain how converting a credit union to a bank is a "good service to the public."

Is anyone paying attention? GAO notes that in the 1980s it published studies indicating there were problems brewing in the savings and loan industry; good to see those warnings were heeded. Maybe there are just too many studies. I guess we won't know until someone publishes a study.

Frank J. Diekmann is Editor of The Credit Union Journal. He can be reached at fdiekmann @cujournal.com.

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