Approximately 4,000 people turned out last week for CUNA's Governmental Affairs Conference. On this page in a quick, easy-to-read form, is a summation of much of what went on and was said during the meeting. Additional coverage will appear next week.
Old Record Album, New iPod Used To Make Point
WASHINGTON-A lover of props (having brought a bat on stage with him back in October during CUNA's Future Forum in Honolulu), CUNA Chairman Dick Ensweiler brought both an iPod and an old vinyl record to the stage with him. When Ensweiler pantomimed turning on the iPod to hear a song, a recording of "Let's Get It Started" instantly filled the room on cue. When Ensweiler pantomimed turning the iPod off, the music magically ceased. "That was the Black-Eyed Peas. Or so I'm told," Ensweiler quipped, then went on to note that he's more of an Eagles fan himself, at which point he once again "turned on" the iPod, and the room was filled with "Take It Easy."
Treasury Execs Extolls HSAs as 'Perfect Trifecta'
WASHINGTON, D.C.-Calling Health Savings Account a "perfect trifecta" The Treasury Department's Thomas Reeder encouraged credit unions to begin offering HSAs during NCUA's Access Across America workshop held in conjunction with CUNA's Governmental Affairs Conference. The beauty of offering these accounts, the associate benefits tax counsel of Treasury's Office of Tax Policy explained, is that it's no different from offering IRAs-the only real difference, he added, is the credit union difference. "It's exactly the same as as offering IRAs. There are just the two forms to fill out, and you take their money and you're done," he said. "But of course, the thing is, credit unions don't just want to take their customers' money. You actually want to educate them and make sure that they're really doing it right. You actually want to help your customers. And I think that is cool. That's neat. It's very refreshing."And just to make sure no one missed it, NCUA Chairman JoAnn Johnson, who hosted the workshop, said, "except we don't call them customers. We call them members."
Former Heavyweight Champ In Surprise Appearance
WASHINGTON-In keeping with the boxing theme of the GAC, CUNA surprised the audience by bringing out former Heavyweight Boxing Champion of the World Larry Holmes. Relating how people had underestimated his ability, saying his legs were too short, Holmes told credit unionists, "they didn't know just how big my heart is...I'm here to inspire you. People said I couldn't do it. I'm living proof that you can do whatever you believe in." Holmes was on hand to promote the National Child ID program, which a number of credit unions have supported. And he explained that his taunting of George Foreman wasn't simply because, "I want to kick his butt and make a couple million bucks" it was also to make a point about why credit unions must keep fighting the banks. "It's not that I like fighting," he told credit union attendees. "I do it because I make money at it. Without fighting I'd have nothing. So I gotta keep fighting, and so do you. Don't give up the fight."
SBA Process Ensures Underwriting Best Practices
WASHINGTON, D.C.-Credit unions have heard all about the fact that becoming an SBA lender offers big benefits by providing a guarantee on riskier member business loans, as well as offering certain regulatory compliance breaks, but one CU pointed out another plus to the program: it also guarantees that a CU really does the proper due diligence on those loans. "The SBA process requires that you dot all your 'Is' and cross all your 'Ts,'" said Michael Hearne, CEO of Lafayette FCU. "It pretty much forces you to do the underwriting right." And that's extremely important when making MBLs he told the audience at NCUA's Access Across America workshop held in conjunction with CUNA's Governmental Affairs Conference.
Fed Governor Discussed Check 21, ALL Trends
WASHINGTON, D.C.-Federal Reserve Board Gov. Mark Olson focused on Check 21, financial literacy and a quick economic snapshot during his remarks before CUNA's Governmental Affairs Conference. Noting that CUs were on the leading edge of check truncation, Olson observed that Check 21 hasn't led to as quick of an adoption of electronification technology as had been expected.
"It's been 18 months since passage of Check 21 and six months since its implementation, and it is clear that the goals of Check 21 are still valid," Olson told the credit union faithful. "It's clear there's been an increased investment in technology to speed up the process and it's also clear the process is moving much more slowly than it was thought it would happen."
Even so, Olson expects to see that continue to increase over time. His second issue, financial literacy, is the one where "we have the best chance to do as great a good" as any other effort by the financial services industry.
"With electronic access to credit bureaus, scoring models and an unprecedented access to credit for the majority of the population, financial literacy is extremely important," he suggested. "There's an extraordinary asymmetry between the number of products and offers out there and the knowledge and understanding of those products."
As for the economy, Olson looked to the decision by some financial institutions to increase reserves for credit losses as an indicator of where at least one portion of the economy is going.
"What banks are saying is that credit quality is as good as it's ever been, and it's not ever going to get better," Olson explained, leaving the implication that credit quality can go in only one direction, then: down.
For that reason, he said the Fed has noticed more banks are increasing their allowance for loan losses.
Mica Stresses He Doesn't Hate Bankers, But...
WASHINGTON, D.C.-As banks continue to turn up the heat on credit unions, why is CUNA CEO Dan Mica trying to show his kinder, gentler, "can't we all just get along" side? Because a number of credit union CEOs have complained to him about his fiery "we hate banks" speeches, he explained at the CUNA GAC.
But even as tried to "make nice" by pointing out that not all banks and bankers are evil, he said he wanted to have a "family conversation" about why the banks get him all riled up. "We're not picking on banks," he insisted. "But the fact of the matter is, if the banks win, consumers do lose. If they shut us down, Americans will be hurt. It's the hypocrisy of the zealots that provokes us to yell and scream."
Take, for example, the man slated to become the next chairman of the American Bankers Association, Harris Simmons, CEO of Utah's Zions Bank. "I'm sure he's a gentleman," Mica related. "But he wants to shut down credit unions. I'm not raising the rabble, I am trying to stay calm. Simmons put out a press release that Zions Bank had another record profitable year, growing profit from $338 million to $406 million-a 20% increase for the year. I can congratulate him on that and not get upset. But then here is a press release in which he complains that he would have been able to make 20 more basis points in profits if it weren't for credit unions forcing him to pay his customers more. Imagine the hypocrisy. If only it weren't for credit unions, he could have taken more money from his customers."
But before Mica could offer any of his thoughts as part of a "family moment" with credit unions, he began with what wasn't exactly family-friendly entertainment. Due to problems with his microphone, Mica needed to make a quick swap with GAC host Paul Berry, whose microphone was functioning properly. A backstage sound person hustled on-stage to facilitate the swap-which apparently required a certain amount of undressing and groping. Mica turned his back on the crowd for modesty's sake, and Berry attempted to help shield him during the change. When at last Mica was all hooked up, he turned around and told the audience, "we're family, and we can do anything in front of family."
And in what Mica called "another family moment," the credit union movement paid tribute to CU veteran Pete Crear, who is retiring after 40 years in credit unions. Crear was given a standing ovation and remarked, "Thank you for letting me serve in the only way I know how."
New CUNA Mutual CEO Post Gets Introduction
WASHINGTON, D.C.-Easily one of the most sought-out people at CUNA's GAC this year wasn't a lawmaker, nor a regulator, nor even former Heavy Weight Champ Larry Holmes, who made a surprise visit-it was Jeff Post, the new CEO of CUNA Mutual Group. Post told The Credit Union Journal that he really wanted to try to get around the exhibit hall so he could see the booths other than his own company's, where he seemed to keep getting stuck each time he walked into the hall. "I'm going to have to remove my nametag and walk around with someone I don't know," he laughed. "I'm still new enough around here that without the nametag, hardly anyone would know who I am."
Meanwhile, in his remarks to GAC, Post briefly stole the stage when he related how he had asked CUNA Chairman Dick Ensweiler how best he could be of help to CUNA President Dan Mica without crowding him and how to differentiate himself from Mica. Post said Ensweiler gave him three pieces of advice for differentiating himself from Mica: "first, keep your speeches short; second, tell good jokes and third, never raise your hands and say 'Isn't it great to be in Washington.'"
Johnson Reiterates Support For Risk-Based Capital
WASHINGTON, D.C.-NCUA Chairman JoAnn Johnson stumped for risk-based capital measures of credit unions, calling it a better way to achieve PCA's objectives and consistent with sound risk management practices. It was no surprise that this was a primary point during her remarks before CUNA's Governmental Affairs Conference, but she also managed to slip in a few other topics about how NCUA can achieve her goal of adding value to the industry the agency regulates. One example is a recent white paper NCUA published on community development credit unions.
"Those of you who aren't CDCUs are thinking this has nothing to do with you, but that is not true," she suggested. "This is applicable to all credit unions because it examines serving people of modest means, and I'm pretty sure that affects all of you." Johnson also reported that NCUA will be reevaluating the use of the matrix in determining CAMEL ratings. "The matrix is not dynamic, It's not risk-focused and it's not forward looking," she said, suggesting that NCUA must determine if it's still a relevant tool. The regulator also expressed surprise that so few credit unions-only about a quarter-have taken advantage of the NCUA Express program, through which CUs can sign up to receive NCUA communications via e-mail instead of snail mail.
"I had thought we'd have about 50% signed up by now," she observed. "Not only does this allow you to get valuable information faster, but it saves us money. And as you know, our money is your money."
Johnson began her remarks, incidentally, by appealing to her fellow Midwesterners even as she teased them with a story about a recent visit to her home state of Iowa. Johnson related how there was some debate about how to pronounce the name of the town Des Moines. The question was whether the "S" in "Des" and "Moines" were pronounced or silent. To set the record straight, they asked a person who was a long-time resident of the area to say slowly and clearly how to pronounce where they were. The Des Moinian replied, slowly and clearly emphasizing every syllable, "Bur-ger King."
Franks Has Serious Insights, Quips For Audience
WASHINGTON, D.C.-Credit unions, like America, cannot afford to pretend attacks will just go away, according to retired Gen. Tommy Franks. Having spearheaded the military action in Afghanistan and the war in Iraq, Franks knows a little something about battles. "I'll tell you what I told the 9/11 Commission when they asked me what could we have done to prevent the attacks of Sept. 11," Franks said in his remarks before CUNA's GAC. "Even though terrorists started killing Americans in 1983, and again in 1993 and 1996 and 1998 and 2000. And we knew Osama Bin Laden planned these attacks, and we knew he was harbored in Afghanistan, but we did nothing. When this country turns its back on problems and hopes it will just go away, did it go away? No. We are paying for that inaction." The message to credit unions: doing nothing to respond to attacks is not the answer.
But Franks' speech was laced with many notable quotes including: "Capitol Hill is a lot like Disney World because in order to succeed you sort of like have to suspend disbelief;" "We live in Tampa, now, and we love it there because we love New Yorkers. Plus, Cathy and I are the youngest ones there;" and when a member of the press once asked Franks where he thought Osama Bin Laden was, Franks said he replied, "if I knew where he was, he'd be dead." When President George W. Bush met Franks (who had been promoted to a four-star general by predecessor President Bill Clinton), for the first time, Bush told Franks, "I understand you and Laura graduated from the same high school," to which Franks replied, "That's true, but you don't have to worry, I didn't date her."
