Former NCUA Chair Prepares To Go Stateside

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DES MOINES, Iowa — After a two-year hiatus from credit unions, JoAnn Johnson has returned as head of Iowa's credit union agency.

Johnson, a former Iowa state senator, served on the NCUA board from 2002 to 2008, the last four years as chairman. Johnson spoke with Credit Union Journal about her new role and the tasks facing CUs and the regulator in this state.

Credit Union Journal: Credit unions in Iowa have fared well during the recession. Does that make stepping into your new position easier?
Johnson: It makes me very confident in the credit unions in our state, knowing that the regulator and the regulated have been doing a good job. I do not see any particular dangers on the horizon for credit unions here. We have 133 CUs and not one is below 8% capital. We had no failures last year and I do not have one credit union in prompt corrective action. Last year total loan growth was up 8% and delinquencies were 1.23%.

CUJ: Will your experience at NCUA help you as a state regulator?
Johnson: It's given me a background on regulatory procedure. But there is a caveat-the state of Iowa does not have parity with the federal regulations, so there will be a learning curve. But it does give me a leg up.

CUJ: In your time at NCUA, you worked on guidance around member business lending. What is your stance on MBL?
Johnson: While I was at NCUA I had to formulate the member business lending rewrite. And I believe member business lending is a key component for helping credit unions meet members' needs. Plus, the governor of Iowa is very interested in helping small business because that's where the jobs are. Last year member business lending increased by 24% in Iowa. So the need is here. Having said that, member business lending is not for every credit union. It is important to make sure it is done correctly. We are here to assist credit unions in doing member business lending the right way."

CUJ: You have been in the office less than a week, what are your early priorities?
Johnson: Unfortunately the number-one issue is this office's budget. The governor has requested we reduce our budget by 5.5%.

CUJ: What will be a priority concerning the direction you provide to examiners?
Johnson: I want to set an even higher standard for the exam process, but I want it done with a cooperative spirit. I will encourage communication between the credit union and the examiner-both ways. And I want to make sure we take care of problems before they happen. I think good communication plays a large role in that happening.

CUJ: What at the state level needs to be done to ensure credit unions are regulated effectively?
Johnson: I have good exam team in place, and I want to make sure credit unions know they can contact the examiner and me to get problems resolved. I will have an open-door policy. I also need to do a thorough review of the regulations to see if there are things that need to be adjusted or cleaned up. There may be some changes we can make legislatively or through regulation that would allow a smoother process.

CUJ: While at NCUA, you were a supporter of Reg Flex. Although the program does not affect state-chartered CUs, what is your stance on Reg Flex today?
Johnson: I am still supportive of Reg Flex, but decisions (NCUA) makes in this area have to be considered in the context of the times. And the times are not the same as when I was at NCUA. You have to look at everything that is affecting credit unions-that is what dictates what needs to be done.

CUJ: What have you been doing since you left NCUA?
Johnson: I have been helping my husband with his Des Moines lobbying and consulting practice.

CUJ: How did this opportunity with the Iowa CU office happen?
Johnson: I have been active politically and stayed involved at the state capitol. I think my name was put forward from others knowing my background, and I was asked if I would submit a resume.

CUJ: Any drawbacks to the new job?
Johnson: Only one. I live in Panora, about a one-hour commute to Des Moines. That's going to take away from the time spend with my twin grandchildren, who turn three in May.

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