NCUA is a bipartisan agency. It's time it acted like one.

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Although becoming a board member or chair at the National Credit Union Administration does not require a degree in mathematics, it is often helpful to know how to count to two and, even better, to three. The critical point, of course, is not in merely counting to two or three, but in developing and implementing processes and procedures to resolve differences among the board offices. Although opinions will vary, the range of disagreement will narrow if board and staff interactions are conducted in a transparent and respectful manner.

Showing respect for policy differences articulated by a colleague or staff member does not reflect weakness or the betrayal of one’s personal convictions. To the contrary, graciously acknowledging a differing perspective enhances the willingness of all sides to negotiate and – yes – to compromise while ensuring the core integrity of each position. As I have stated many times during my tenure at the NCUA, the best ideas must prevail regardless of who develops them.

Chairs should not expect board members to subordinate their independent analysis of the issues to the views of the chair. If Congress had intended for board members to fall in line behind the chair like toy soldiers, a single director would lead the NCUA, such as at the Office of the Comptroller of the Currency, Federal Housing Finance Agency or Consumer Financial Protection Bureau. Autonomous – yet creative, respectful and inclusive – board offices best serve the agency and the credit union community by working together in a good-faith, fair-minded manner to address the challenges presented to the National Credit Union Share Insurance Fund and the credit union system.

Some may consider my comments as challenging to implement in day-to-day practice among politically appointed board members. Although that is often the case, Rick Metsger and I ran a collegial, collaborative and bipartisan board for just shy of three years while Rick served as chair for nine months and I served as chair for the balance. We were able to accomplish this by approaching each other in a forthright and transparent manner.

During those years, policy differences were promptly addressed through the shuttle diplomacy of our respective Chiefs of Staff, Sarah Vega and Mike Radway. Although the negotiations were occasionally tense, they were never unprofessional or mean spirited, as we appreciated that reasonable minds may differ. We worked together as a team and modified our positions as the best ideas developed.

Both board offices also respected the NCUA staff and welcomed their valuable input and analysis. Nothing is gained from treating another board office or staff member otherwise, except to sow the seeds of dissent and distrust. We eschewed self-absorbed references to “I” and “me” and focused on “we” and “us,” as do all effective teams with a shared mission, such as the U.S. military.

A successful board is anchored in respect and trust. To that end, Rick and I met together after each board meeting (with the general counsel present to assure adherence to sunshine laws) to discuss our communication processes and dissemination of information. Above all, we met one-on-one to ensure that consultation between our offices came early and often, and that there were no secrets or hidden agendas. Those actions built trust and provided the foundation for successful board actions.

Perhaps the principal advantage of working together as professional colleagues is that it affords the board the opportunity to develop and implement a series of big ideas, instead of a group of limited-scope, low-hanging-fruit initiatives. Our big ideas initiatives included:

  • Field-of-membership reform and multi-year litigation with the American Bankers Association that recently ended in a United States Supreme Court victory for the agency;
  • Examination flexibility and modernization, foundational work on virtual examination and reimagining of the agency’s IT infrastructure systems;
  • Top-to-bottom reorganization of the agency, including the closing of two field offices and the reduction of leased space by 80%;
  • Merging the Temporary Corporate Credit Union Stabilization Fund into the NCUSIF, thereby permitting the payment of nearly $900 million back to credit unions, avoiding over $700 million in new assessments, enhancing the safety and soundness of the NCUSIF by over $1 billion, and setting the stage for recoveries from the failed Corporates; and
  • Developing, proposing or finalizing rules and guidance on a variety of crucial topics, including the overhead transfer rate, capital planning and stress testing, voluntary mergers, call report modernization, consumer protection, subordinated debt, the appeals process, bylaws, payday alternative loans and more.

If we had gone forward together as a board, I believe the next big idea we tackled would have been sensible, safe and sound capital reform, including risk-based net worth, subordinated debt and credit union leverage ratio regulations that I’m optimistic we would have finalized by now. Like the rules already available to community banks, credit unions merit similar regulatory relief that doesn’t impair capital or create a safety and soundness risk.

I’d be remiss if I did not also note the accomplishments of former Chairs Mike Fryzel and Debbie Matz who worked together in a collegial manner during some of the most challenging days of the 2008/2009 Financial Crisis. Their bipartisan work laid the foundation for the success of the credit union community over the past decade.

Collegiality, collaboration and bipartisanship really do matter. Not only do they create a highly functional board and higher staff morale, they lay the foundation for the development and implementation of the big ideas that help credit unions grow, thrive and prosper in a safe and sound, prudently regulated manner, all in accordance with the letter and spirit of the Federal Credit Union Act. If a board adopts this governance model, little need will develop to count votes, as all members and staff will work together in good faith to achieve each shared goal.

This article has been updated to reflect a correction regarding the amount of money returned to credit unions following the merger of the Temporary Corporate Credit Union Stabilization Fund and the NCUSIF.

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Financial regulations NCUA Mark McWatters