BOSTON—NCUA’s Office of Small CU Initiatives (OSCUI) is adjusting its focus away from succession planning at small credit unions.
“In a practical sense, succession planning is almost impossible for a small credit union,” said OSCUI director Bill Myers, speaking as part of NAFCU’s Annual Conference here.
The reason for that, he said, is because many small CUs are only staffed by a CEO and a teller, and tellers (or other low-level staff) frequently are not equipped to step into those senior-level roles. “I’m sure in some cases that works, but in many cases they don’t have the capacity to take over that function.”
While OSCUI still promotes succession planning, Myers explained that the new strategy is centered on training new managers immediately after they take their job. As part of that, OSCUI has begun offering “CEO Boot Camps,” daylong sessions to familiarize new CEOs with what they need to know and also to provide vital networking. While NCUA can only teach incoming CEOs so much, the networking function exists “so those guys who come into that role will at least know who to call about their questions.”
Myers also told the crowd that OSCUI is less concerned with a CU’s net worth than it is about growth.
“If you’re not growing, it means that your members love you less than they did in the past,” he said. “Growth is their way of appreciating it, and if they don’t appreciate you, you’re not long for this world.”
He reassured the crowd that examiners that work in OSCUI are there because they feel that they can help CUs better by taking a softer approach. In addition to CEO boot camps, OSCUI also offers loans and grants for small CUs, including grants for relocation from home-based offices—something he said NCUA is concerned about.
Not only do home-based CU’s create the perceptions that NCUA is not a serious organization, he said, it makes it difficult for examiners to do their job. “It’s an odd environment to perform a financial analysis,” he said.
Issues With Records Storage
NCUA has also had problems with records storage in home-based credit unions, and Myers recalled one Nevada CU in which the homeowner died and the son refused to turn over the records, after which authorities had to break down the door to get the financial records.
“The agency has been concerned about this, and one of the initiatives we have is funding small credit unions to move into a retail location,” said Myers, adding that that’s also a positive step and a way for small CUs to grow.
Similarly, about 50 CUs still file their 5300 report on paper, meaning NCUA has to pay someone to re-key that data into a computer, which is both time consuming and creates the opportunity for mistakes. Starting in September, the agency will begin to require that 5300s be filed electronically. Those 50 CUs will be offered grants to help cover the expense of adding a computer.
The kicker, said Myers, is that some of these are $20-million credit unions. “It seems like by 2013 we’ve proved that (computers) are really useful tools.”
