Johnson Puts Early Emphasis On Safety, Education

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Two weeks into her term as chairman of the NCUA board at the time she spoke with The Credit Union Journal, JoAnn Johnson said she is getting used to the increased attention that comes with moving up from vice chair.

Johnson said she does not consider herself in a new position of power, but in a position of leadership.

"There is a lot of paper that crosses my desk that requires the signature of the chair," she said when asked the biggest differences between the two jobs. "There are more demands on my time, and more media to talk to, but it gives me a broader pulpit and more opportunity to champion causes."

Two of the most important items on Johnson's agenda are the importance of financial education for young people and member business lending. She said both areas represent excellent opportunities for CUs to make a difference in the lives of their members.

According to Johnson, when members apply for their first car loan or first mortgage, credit unions can provide them with financial education they aren't getting in school.

"Teach them the importance of their credit rating. I hope to turn around the new way of thinking by people under 25-many of whom have no intention of paying off their credit cards."

As for member business lending, Johnson said small businesses are driving the economy and creating jobs. However, only 2% of current CU loans are MBLs, with a paltry average of $125,000 per loan, so there is plenty of room for growth.

"This area is a golden opportunity, if it's done right," she said. "I'm going to continue to talk about it and bring it to the attention of credit unions. There will need to be additional regulatory changes down the road, and NCUA is looking for feedback on this issue."

Meanwhile, in remarks before the CUNA CFO Council attendees, Johnson called on credit unions to educate legislators at the national and local levels. For example, when asked by a member of the audience about increasing investment opportunities through business lending, she said the 12.5% cap is statutory and cannot be changed by regulation. Instead, CUs must discuss the issue with lawmakers.

"I am now a regulator instead of a legislator. Instead of making the law, I am enforcing it," she said. "My philosophy is earned regulatory flexibility. Credit unions have proven themselves in many ways, so they deserve a reduction of burdensome regulation."

NCUA has become "very forward looking," Johnson declared. She said it is beefing up training for examiners in all areas of risk management.

Communication is another area where Johnson said she hopes people will see an improvement by NCUA. "If I don't know, as a regulator, how regulations are impacting credit unions, then I'm not doing my job. Communication is very important to me."

When asked about CUs converting to mutual savings banks, she noted, "NCUA has passed an updated regulation on disclosure. It requires disclosure of potential benefits to management if conversion takes place. Only 25 credit unions have converted-out of 9,500-so it is not a 'trend.' Where the trend is, is the conversion from a mutual savings bank to a stock-based institution."

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