BEL AIR, Md.-NCUA's changes to its Reg Flex program are appropriate given the changing economic environment, according to Rose Ann Lambert, CEO of Freedom FCU here.
"Business is not static. We do not operate in a vacuum and when the economy changes you have to look at the ways you're doing things," she said, suggesting that the way the program was set up could have played some role in retail credit union failures. With more than 350 "problem" institutions, it is only natural that the regulator's oversight would become more stringent as it is NCUA's responsibility to prevent future problems, Lambert pointed out, although she does believe the program works for the most stable and conservative institutions.
"I do think there is room for the flexibility that this program offers, but as times change, as (NCUA Chairman) Debbie Matz stated, maybe the program needs to change as well and address the risks that are in our industry today."
Lambert specifically noted the emphasis being placed on concentration risk as especially appropriate given the role certain assets played in retail and corporate CU failures. As for her $231-million institution, Lambert said she welcomed examiners as Freedom FCU is a "very conservative" institution that makes "very sound decisions." Examiners have helped maintain that conservative vision with their advice, the CEO explained-a recently concluded exam suggested shedding some long-term mortgage assets and Lambert said FFCU plans to do exactly that.
"I welcome their input; they see many shops. They have a lot of insight and a lot to share and if they have a recommendation, I'm all ears," she said, though the credit union has debated certain issues with its examiners in the past. "But they've been healthy debates and we've never had a problem."
