WEST PALM BEACH, Fla. – While some credit union CEOs continue to express dismay at NCUA in the wake of its announced plans to boost its budget — and many employees’ pay — in 2011, other are saying say pay increases are a necessary investment to avoid having to pay higher costs further down the road as the result of insufficiently trained and staffed examination teams.
Donna Bland, president and CEO of The Golden 1 CU in Sacramento, Calif., said she recognizes there is a need for increased examinations within credit unions. “There is a need for improved oversight,” Bland said. “NCUA and credit unions should have the highest quality examiners. If the raises that were negotiated within the contract and with the union help to attract and retain top performers and high-quality examiners, then the industry and the insurance fund is better off in the long run. I feel having a collaborative relationship with our examiners is a good thing to have, because we all want strong credit unions. I want well qualified examiners on my exam.”
Bland added she supports NCUA’s creation of the Office of Minority and Women inclusion as a means of increasing diversity.
Similarly, Teresa Halleck, president and CEO of San Diego County CU, said she also sees the need to hire and retain competent examiners, as “participants in a cooperative insurance fund, it is in everyone’s best interest that our federal examiners be highly-qualified individuals who are able to understand the complexities of the markets and perform well during these turbulent times.”
But one CEO, requesting anonymity, objected to the larger budget and the pay increases, which will range from 5% to 8%, saying that the agency has declined to accept responsibility that “they hold an equal level of responsibility for the corporate mess.”
“They regulated the corporates, they knew of these private label mortgages, yet they didn’t express any concerns at any time during the good times,” the CEO said. “They seem to forget that for the large corporates that failed, such as U.S. Central and WesCorp, had a full time NCUA examiner assigned to each. That said, the corporate management and boards did fail to adequately protect their balance sheets by holding such a large concentration of these investments.”
Ken Burns, president and CEO of Patelco Credit Union in San Francisco, said at first blush the pay increases seem “high,” but he is reserving judgment in the absence of comparable data from other federal agencies and even accounting firms.
“We [credit unions] complain on the one hand that examiners are too inexperienced for the complex organizations we are running today,” said Burns. “Anecdotal evidence seems to suggest that NCUA suffers from fairly high turnover, diluting their knowledge base.”
Burns noted that hindsight offers some perspective. “Had greater expertise on the regulatory front led to reduced losses in natural person as well as corporate credit unions, in hindsight we’d pay ‘whatever it takes’ to provide that assurance,” Burns said.
