NAFCU’s 50th Annual Meeting kicks off in Honolulu
June 15, 2017 3:38 PM
NAFCU heads to the Aloha State
The National Association of Federally-Insured Credit Unions opened the curtain on its 50th Annual Meeting Wednesday in sun-soaked Honolulu. Dan Berger, NAFCU’s president and CEO, set a lofty goal, acting NCUA Chairman J. Mark McWatters talked regulatory reform, and author and leadership expert Jeff Havens broke down the working world into “old people” and “young people.”
Berger praises the movement
Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions, welcomed attendees to NAFCU’s 50th Annual Conference in Honolulu Wednesday. He recalled the history of the organization, its legislative triumphs and the fact his credit union helped him buy his first car.
“Credit unions are responsible. They are committed to data security. They don’t bill you for basic services,” he said. “Consumers are starting to pay attention across America. Since the Great Recession, credit unions have been growing at a faster pace than ever before. Credit unions have $1.4 trillion in assets and a greater market share. We are the leaders of an industry that will not be stopped by the big banks or the greedy Wall Street profiteers. Credit unions are proving every day they are the better alternative to big, impersonal, high-fee banks.”
Credit unions also are tackling the big issues in people’s lives, Berger continued, starting with student loan debt. He said CUs are helping members understand their credit score and give them incentives to improve. They also are helping older Americans who could not afford to retire plan their estates.
“Today we represent all federally insured credit unions, but remain true to our roots,” Berger said of NAFCU. “Since we made the decision to open our doors to state-chartered credit unions, more than 200 have joined. NAFCU has one of the highest Net Promoter Scores, three times higher than the average for trade associations. We constantly protect the credit union tax exemption from greedy bankers. Our victories over the past 50 years did not happen by chance, and frankly our future success is not guaranteed. Our founders envisioned a brighter tomorrow and worked hard to make it happen. Let’s keep that vision alive. Let’s accomplish something really extraordinary – create a world in which every American joins a credit union.”
“Credit unions are responsible. They are committed to data security. They don’t bill you for basic services,” he said. “Consumers are starting to pay attention across America. Since the Great Recession, credit unions have been growing at a faster pace than ever before. Credit unions have $1.4 trillion in assets and a greater market share. We are the leaders of an industry that will not be stopped by the big banks or the greedy Wall Street profiteers. Credit unions are proving every day they are the better alternative to big, impersonal, high-fee banks.”
Credit unions also are tackling the big issues in people’s lives, Berger continued, starting with student loan debt. He said CUs are helping members understand their credit score and give them incentives to improve. They also are helping older Americans who could not afford to retire plan their estates.
“Today we represent all federally insured credit unions, but remain true to our roots,” Berger said of NAFCU. “Since we made the decision to open our doors to state-chartered credit unions, more than 200 have joined. NAFCU has one of the highest Net Promoter Scores, three times higher than the average for trade associations. We constantly protect the credit union tax exemption from greedy bankers. Our victories over the past 50 years did not happen by chance, and frankly our future success is not guaranteed. Our founders envisioned a brighter tomorrow and worked hard to make it happen. Let’s keep that vision alive. Let’s accomplish something really extraordinary – create a world in which every American joins a credit union.”
McWatters offers reg reform update
Acting National Credit Union Administration Chairman J. Mark McWatters updated attendees on several regulatory issues at NCUA. He noted President Trump issued several recent executive orders, including an order directing regulatory reform. “Technically they do not apply to independent agencies, but we are not going to ignore them,” he said. “We are going to follow the spirit of the orders. We are developing a matrix to decide which regulations can easily be fixed and which are tedious to comply with but don’t give much bang for the buck.”
Reg reform focus
McWatters ran down 10 areas NCUA is examining for regulatory reform, including stress testing, the appeals process, voluntary merger rules, alternative capital, member business lending and more.
He also touched on an executive order from President Trump that covers how regulatory agencies are structured.
“We are looking at the structure of NCUA from top to bottom,” said McWatters, “finding areas that could make the organization more efficient and more transparent. We have five regions now, we are considering having either more or fewer regions to increase efficiency. The 5300 call report – every time we add a line to that it is a hassle for someone because they have to reprogram their systems. We are going to simplify call reports. We will do more virtual examinations as part of a rethought examination process. We want to form advisory committees.”
The National Credit Union Share Insurance Fund’s equity ratio is trending down, “which is a problem,” McWatters said, because it could lead to an assessment for the credit union industry. At the same time, NCUA has the Stabilization Fund, whose underlying assets are growing in value. NCUA has recovered $5 billion gross related to lawsuits, but has paid $1 billion to lawyers, “which is a very sore subject to me. But that is what the contract says and they refuse to renegotiate.”
“The Share Insurance Fund cannot borrow from the Stabilization Fund,” McWatters said. “There is a possibility of merging the two together, which would solve several problems. Philosophically it seems like a good solution, but the problem is the accounting is difficult. We are making progress on this, it is tricky.”
Fraud accounts for about half the losses in the Share Insurance Fund, so NCUA is developing regulations to combat the problem, McWatters continued. He said the agency is concerned about cybersecurity and also is working to address that issue. “Chartering a credit union is a complete nightmare, so we are working on that. We are talking with the CFPB to try to get credit unions exempted from new HMDA requirements.”
“Rick Metsger and I work together very well. We do not agree on everything. We are two-person board, split one D, one R, and if we were like the rest of Washington we would be deadlocked. We negotiate on what is the best for credit unions.”
He also touched on an executive order from President Trump that covers how regulatory agencies are structured.
“We are looking at the structure of NCUA from top to bottom,” said McWatters, “finding areas that could make the organization more efficient and more transparent. We have five regions now, we are considering having either more or fewer regions to increase efficiency. The 5300 call report – every time we add a line to that it is a hassle for someone because they have to reprogram their systems. We are going to simplify call reports. We will do more virtual examinations as part of a rethought examination process. We want to form advisory committees.”
The National Credit Union Share Insurance Fund’s equity ratio is trending down, “which is a problem,” McWatters said, because it could lead to an assessment for the credit union industry. At the same time, NCUA has the Stabilization Fund, whose underlying assets are growing in value. NCUA has recovered $5 billion gross related to lawsuits, but has paid $1 billion to lawyers, “which is a very sore subject to me. But that is what the contract says and they refuse to renegotiate.”
“The Share Insurance Fund cannot borrow from the Stabilization Fund,” McWatters said. “There is a possibility of merging the two together, which would solve several problems. Philosophically it seems like a good solution, but the problem is the accounting is difficult. We are making progress on this, it is tricky.”
Fraud accounts for about half the losses in the Share Insurance Fund, so NCUA is developing regulations to combat the problem, McWatters continued. He said the agency is concerned about cybersecurity and also is working to address that issue. “Chartering a credit union is a complete nightmare, so we are working on that. We are talking with the CFPB to try to get credit unions exempted from new HMDA requirements.”
“Rick Metsger and I work together very well. We do not agree on everything. We are two-person board, split one D, one R, and if we were like the rest of Washington we would be deadlocked. We negotiate on what is the best for credit unions.”
Four generations in the workplace at once
For the first time in history there are four generations in the workforce at the same time: matures, baby boomers, Gen X and millennials. Everyone has seen lengthy charts with characteristics of the various generations, but Jeff Havens, author and leadership expert, says generational interactions really should be thought of as “young people” and “old people.” Because if you have a conflict with someone you either say, “that punk kid doesn’t understand” or “that old fart should just retire.”
“All of us are mixtures of young and old – we have different qualities,” Havens told the crowd. “Sun Tzu said in the Art of War if you are going to defeat your enemy you need to know your enemy. Young people are messed up because they are part of the loneliest generation. Because of all connections available through the Internet, it is actually harder to make connections with people we truly care about. People have an average capacity to care for about 150 people. The world is so much bigger today there are so many options, and if you have too many options the brain gets overloaded. The upside is when young people do connect they connect more tightly than did previous generations.”
Despite the job-hopping stereotype often attributed to millennials, according to the U.S. Department of Labor, today’s 25-to-34-year-olds actually are more loyal in terms of staying longer at a job than previous generations. “Credit unions represent community, and people really want one, so that is a selling point to attract millennials to come work for you,” Havens said.
Old people can meet young people halfway by remembering that loyalty is earned and should not be assumed, Havens said. “Human beings are not instinctively loyal, so young people need to be shown they have an opportunity for advancement. Old people also need to realize not all new ideas are bad ideas. The entire history of business is trying to predict which new ideas will work and which will not.”
Young people need to realize “none of the older people they work with got there overnight,” Havens continued. “Young people believe they have ideas and potential, and cannot understand why, after six months of employment, they have not been promoted to vice president. Young people need to realize advancement is a process, it is not a right. Young people can meet old people halfway by appreciating that fact and respecting the experience of their older colleagues. Old people like doing things the way they have always done them because the way they have done them generally has worked. A company’s practices and processes exist for a good reason. Realize all new ideas are not good ideas.
“No matter what generation you are part of you do not know everything there is to know,” Havens said.
“All of us are mixtures of young and old – we have different qualities,” Havens told the crowd. “Sun Tzu said in the Art of War if you are going to defeat your enemy you need to know your enemy. Young people are messed up because they are part of the loneliest generation. Because of all connections available through the Internet, it is actually harder to make connections with people we truly care about. People have an average capacity to care for about 150 people. The world is so much bigger today there are so many options, and if you have too many options the brain gets overloaded. The upside is when young people do connect they connect more tightly than did previous generations.”
Despite the job-hopping stereotype often attributed to millennials, according to the U.S. Department of Labor, today’s 25-to-34-year-olds actually are more loyal in terms of staying longer at a job than previous generations. “Credit unions represent community, and people really want one, so that is a selling point to attract millennials to come work for you,” Havens said.
Old people can meet young people halfway by remembering that loyalty is earned and should not be assumed, Havens said. “Human beings are not instinctively loyal, so young people need to be shown they have an opportunity for advancement. Old people also need to realize not all new ideas are bad ideas. The entire history of business is trying to predict which new ideas will work and which will not.”
Young people need to realize “none of the older people they work with got there overnight,” Havens continued. “Young people believe they have ideas and potential, and cannot understand why, after six months of employment, they have not been promoted to vice president. Young people need to realize advancement is a process, it is not a right. Young people can meet old people halfway by appreciating that fact and respecting the experience of their older colleagues. Old people like doing things the way they have always done them because the way they have done them generally has worked. A company’s practices and processes exist for a good reason. Realize all new ideas are not good ideas.
“No matter what generation you are part of you do not know everything there is to know,” Havens said.
