Dollar's Days At NCUA
You won't catch Dennis Dollar anguishing over unfinished business as he packs up his stuff to leave NCUA this week.
That's because the 51-year-old, soon-to-be ex-NCUA Chairman is convinced he has completed what he set out to do when he joined the NCUA Board seven years ago, the last three of which he served as chairman. Unfinished business? Dollar admits to some, like his proposal for a risk-based capital system for credit unions, but the list of completed tasks is much longer.
"I'm pretty confident we accomplished most of what we set out to do," said Dollar, in an interview with The Credit Union Journal in his corner office just before embarking on his final days at the agency.
Dollar, who resigned effective the end of the month, was to spend his final days as NCUA Chairman testifying before Congress next to Federal Reserve Board Chairman Alan Greenspan and other financial regulators and speaking to audiences in Texas.
Ticking off the accomplishments in his days as NCUA Chairman, Dollar refers to a list of priorities he and his long-time lieutenant Kirk Cuevas compiled in the days just after newly elected President George W. Bush appointed him chairman of the agency in January 2001. By then Dollar had served more than three years as a minority member on the three-person panel, during which he spent much of his time being courted as a swing vote by feuding colleagues Norm D'Amours and Yolanda Wheat.
The list includes 24 specific items that have become familiar to the credit union movement in the intervening time and includes some surprises: reduce growth in the NCUA budget; implement a risk-based examination program; consolidate central office departments; increase underserved area expansions; improve overhead transfer process; streamline community charter conversion process; modernize member business lending rule; authorize tradewide, industrywide and professonwide (TIP) charters; repeal Community Action Plan; increase funding for community development loans; convert executive director from political appointment to career position; reduce number of NCUA regions by one; establish public briefings for the annual NCUA budget.
And it includes a limited number of more general priorities that have helped improve the image of NCUA, which had become widely known as a dysfunctional agency. Those were: improve image of NCUA Board and meeting decorum; improve credibility of NCUA on Capitol Hill; improve respect for NCUA among other regulatory agencies and Treasury; improve working relationships between NCUA and state regulators; improve credibility of NCUA among credit unions; and initiate action on regulatory relief legislation for CUs. Dollar is most proud of his accomplishments in three areas.
First, the restructuring of NCUA. This included the closure of one regional office and the move of the West Coast region from the expensive San Francisco market to lower-cost suburban Phoenix, as well as the consolidation of several departments inside the agency's central office in Virginia. An internal working group helped trim the workforce to 935 employees from a high of 1,045 just four years ago. "We did this all without lay-offs or RIFs (reductions in force) like they had at OTS (Office of Thrift Supervision) and some of the other agencies," Dollar proudly points out.
Second, was the shift in focus at NCUA from what Dollar likes to call "the one-size-fits-all" formula for regulatory oversight, to the risk profile of individual credit unions. This resulted in risk-based examinations and regulatory amendments aimed at loosening the reins on those credit unions with lower risk potential. Dollar's Reg-Flex program, for regulatory flexibility, is being copied now by other financial regulators who like the concept of easing regulatory restraints on the healthier, more able institutions.
Third, was the continued easing on field of membership requirements. NCUA has become much more liberal on its community chartering standards under Dollar, with bigger and more expansive communities awarded at a faster pace then ever before. NCUA innovations under Dollar, such as the online FOM expansion process, have speded up and eased the way to expansions.
But, despite the deterioration of the traditional constraints on FOM, Dollar still sees a role for a government hand in determining a credit union's market. He says the time is not right to ask Congress to eliminate the FOM restrictions, despite the vast expansions of the past five years, that have seen more than 600 federal credit unions and at least as many state charters, move toward a community base. "It (FOM) should continue to evolve with the marketplace," he said. "But credit unions should always have a market focus. I'm a free-market guy, but I also realize the political realities of the situation and I don't believe that nationwide fields of membership are going to happen in our lifetime. I do believe it will continue to evolve. The only real way for credit unions to grow-because they are so constrained in what they can do-is to continue to bring in a new book of business. That's the only way to build net worth. And how do you do that? By offering more products to more people, by expanding your membership base."
Perhaps the thing Dollar is most proud of is the Access Across America program which has actively encouraged mainstream credit unions to expand into low-income communities. Dollar readily acknowledges that credit unions could add underserved communities to their FOMs before he took over the NCUA Board, but his regime has actively courted and prodded credit unions to do so. Over the last three years during Dollar's NCUA Chairmanship, federally chartered credit unions have added more than 40 million potential members to their roles, setting the credit union footprint in hundreds of new communities which have been neglected or outright abandoned by banks and other mainstream financial service providers. "From my point of view, Access Across America will pay dividends for a long time to come. It's giving new diversification opportunities for credit unions who don't want to give up their traditional sponsorship. And politically, I think it's really helped to demonstrate on Capitol Hill and in political circles there are some demonstrable things to show that credit unions doing their role in reaching out."
Where's he going next? If he knows, he's not saying. But after spending most of the last two decades with credit unions, the credit union movement probably hasn't seen the last of Dennis Dollar.