Why More Staff Is Needed
Can a government agency be too small? Yes, according to NCUA's executive director, Leonard Skiles.
Skiles said NCUA's budget, which, until former chairman Dennis Dollar took office, had been a point of contention for CUNA and NAFCU, has shrunk too much, and that it should concern all credit unions.
"It's a little alarming to me to see these significant reductions in budget," he said. "Seventy five percent of our budget is typically pay and benefits. This year we're running significantly below that. We're budgeted for 963 staff; we have 900. The reason it's a problem for me is that as we look at interest rate changes, we need to get more staff into the field, so that next year if we have some problems we will have trained people in place."
Skiles on other issues:
* NCUA employees joining the National Treasury Employees Union: "Many other federal agencies are unionized. We're not exactly sure where all this will lead. We see it as an opportunity to improve how we do business at NCUA. There are approximately 700 'bargaining units' (unionized employees) at NCUA. Our turnover rate at NCUA is low, sometimes alarmingly low. Our employee satisfaction is very high. So we're unsure what the demands will be from the union. I have an expectation we will have to negotiate pay and benefits, even though we believe we have very attractive pay and benefits."
How could that affect credit unions?
Skiles said the potential is there that the union may demand in addition to increases in pay and benefits, adjustments to the hours that unionized employees-including examiners-work.
* On small credit unions: "There have been some suggestions from time to time that we do not devote sufficient resources to small credit unions. Notwithstanding the decline in the number of credit unions, we have been working very hard and paying much attention to reverse this trend. The number of FCUs has declined about 2% per year, and the decline in federally insured credit unions (FICUs) is larger."
In 2003, 371 FICUs disappeared; 2002, it was 333. For the first six months of 2004, 173 FICUs have turned out their lights, and since 2001 some 1,243 have disappeared. There are now fewer than 9,300 FICUs.
"Seventy-seven percent of CUs that have dispappeared were less than $10 million, and 92% were less than $50 million in assets.
"The question is how can we best help the survival rate of these small credit unions. We don't for a moment believe we can stop the disappearance of the small credit unions," he continued. "But one of our major goals is the growth and development of small credit unions, and we have a higher proportional allocation of resources to small credit unions as compared to other asset size credit unions. The average exam hours for every credit union above $5 million has declined; the average exam hours for credit unions of less than $5 million is up 26%. We have implemented other programs to help, such as the Small Credit Union Program and the PALS workshops. And the regular examiner support is still there, as is increased funding through grants."
"We want this trend reversed and are reassessing the way we provide assistance to credit unions," Skiles told NAFCU's meeting. "In every merger that has taken place, the members have benefited from that merger. So you do have to look at these mergers in perspective."