The financial services industry, which includes credit unions, has been through the wringer the past few years. It's been a tough ride, but there is an ever-increasing light at the end of the tunnel.
The economy continues its slow but steady upturn. As a result, loan growth in 2011 was the strongest since 2009. As I recently told the Los Angeles Times, as banks continue to play the "Bank Fee Whack-A-Mole" game, credit union membership is growing at a rapid pace. This story ran in media outlets across the country, underscoring how strongly this message resonates with consumers. Additionally, the 110% increase in traffic to NAFCU's credit union locator site, CULookup.com, further confirms consumers' ever-increasing interest in credit unions.
The FDIC has 813 banks on its problem list-which is more than 10% of the banking industry-only 5.56% of credit unions are considered problem institutions. Also, 92 banks failed last year compared to just 16 credit unions. All while two credit unions are taking over banks. Even more noteworthy, one of the banks being taken over was once a credit union. Did someone say, "Back to the Future?"
Leading the way in adapting to the ever-changing economic environment, we are taking clear advantage of the opportunity by demonstrating our mettle and agility-and NAFCU is expending every effort to make sure your concerns are addressed and to fight on your behalf at every turn in Washington, D.C. We're making progress, but in full recognition of the road ahead, we know there is still work to be done.
A Zealous Advocate
Our compliance team knows firsthand of the drain additional compliance and increased regulatory scrutiny places on your resources. Unfortunately, this is the new reality and wishing things were different will not make them so. As the saying goes, "The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails."
That's why NAFCU has maintained its singular focus-as your staunch advocate in Washington-doing what we do best-serving as an unrelenting and zealous advocate. We led the charge in advocating that NCUA implement changes to the reporting treatment of troubled debt restructurings. While the agency clearly took an inordinate amount of time to act, progress has been made. We perceive that the agency is also listening to our concerns regarding its proposals on CUSOs, loan participations and liquidity. And we will keep up the public pressure as we did in a recent Washington Post Capital Business article where with respect to the CUSO rule, I was quoted as saying, "NCUA is taking advantage of the economic crisis ... to accomplish a long-standing agenda."
Going forward, NCUA needs to retool its cost and benefit analysis for each proposed and final rule it releases. Specifically, the analysis should incorporate quantitative and qualitative factors. Looking backward, the agency must carefully assess the burden once a rule has been implemented to ascertain if cost benefit analysis was accurate.
Recently, the CFPB introduced the Streamlining Regulations Feedback Web Tool as part of its effort to eliminate or streamline rules that are outdated, unduly burdensome or unnecessary, a model the NCUA should emulate.
Making The Case
We will also continue to make your case on strategic defaults, challenge the CUSO rule, question NCUA's proposed arbitrary limits on loan participations, and their use of Suze Orman as a spokesperson. Simply put, we will continue to press the agency to do everything possible to reduce and simplify regs.
We also continue to build the case for regulatory relief with Congress-relief that must be all-encompassing. Late last year, along with CUNA CEO Bill Cheney, I testified in the House on The Communities First Act, a community bank regulatory relief bill. This was the first time credit union representatives had ever been provided the opportunity to testify on a banking bill. As I testified during the hearing, if the purpose of The Communities First Act "... is to help all American's realize their dreams; that they (community banks) weren't part of the problem, but part of the solution ..." then credit unions, who were also not part of the problem, but part of the solution, should be included as well.
Yes, we've made progress and there is light at the end of the tunnel. And rest assured, NAFCU will continue to make sure your perspective is heard and heeded, so you can continue doing what you do best-serving your members. We won't let up and we won't let you down.
Fred R. Becker, Jr., is President and CEO of NAFCU and can be reached at fbecker@nafcu.org.
