Former Fed Officer Abandons Retirement for U.S. Central

James R. Bell thought he was ready for the good life when he retired in 1988 as one of the top officers of the Federal Reserve Bank of Kansas City.

But the fire in his belly never burned out. Last month, Mr. Bell nailed down a job as president of U.S. Central Credit Union in Overland Park, Kan., a central investment and liquidity facility for 14,350 credit unions.

"I'm not a fisher. I'm not a golfer. I'm not a traveler," said Mr. Bell, who is 57 years old. "I felt wasted."

He succeeds Richard Ayres, who died in December of complications from a heart attack.

GAO Expressed Concerns

Mr. Bell will also serve as senior vice president of the corporate network services division of the Credit Union National Association, the Wisconsin credit union trade group and parent company of U.S. Central.

He took over just days before the General Accounting Office released an in-depth study on the credit union industry that included some concerns about U.S. Central.

U.S. Central is set up to provide liquidity to credit unions, but it also invests billions of dollars in funds that credit unions place with 44 corporate credit unions.

Federal Insurance Mostly Lacking

As of June 30, 1990, 43 corporate credit unions had $20.3 billion, or 77% of their assets, invested in U.S. Central. Those funds represent 58 times the individual institutions' combined $351 million net worth, according to the GAO study.

What troubles the GAO is that most of the deposits were not federally insured. ONly about $1.1 billion of the $23.3 billion in credit union accounts at corporates had federal insurance.

Other GAO criticisms:

* The corporates and U.S. Central should receive more intense supervision from the National Credit Union Administration.

* The capital levels of the corporates and U.S. Central should be higher.

* Corporate credit union and U.S. Central loans to one borrower should be limited to 1% of the lender's assets.

Mr. Bell declined to comment in his first days in office and said he had not read the 371-page report.

"I don't feel I was brought in to correct any serious problem," he said. "I want to evaluate over a period of time just where the organization is and where any weak points will be."

Mr. Bell grew up on a farm in southeastern Kansas that was started by his grandfather in 1872. He left Kansas as a teenager to join the Navy and was eventually dispatched to a mine sweeper off the coast of Korea. After his tour, he received a degree in education from the University of Kansas, and proceeded to get a master's degree in mathematics from Central Michigan University.

After working as a junior high school math teacher, Mr. Bell landed a job with the Fed in 1966. He held a number of executive positions, including senior vice president of operations and senior vice president of administration.

Helped Fed to Become a Competitor

Mr. Bell is highly regarded by former Fed colleagues, who say he was instrumental in helping the Fed adjust to free-market competition. The passage of the Monetary Control Act of 1980 forced the Fed to charge fees for services it had provided free to members. It also threw the Fed into direct competition with banks that provided similar services.

"He was very insistent that we find out what the customers need and then give it to them," said Barry Robinson, vice president of public affairs with the Fed, who has known Mr. Bell for more than 20 years.

Mr. Bell also experimented with rotating employees through different jobs to create future managers with a broader understanding of the workings of the Fed.

High Standards for Performance

John F. Moore, a vice president at the Kansas City Fed who worked for Mr. Bell for nine years, said his former boss mixes well with the troops but does not tolerate mediocrity.

"He has an intolerance for people who don't give a 100% commitment to the goals of the organization," Mr. Moore said. "He won't put up with it."

In recent years, Mr. Bell has consulted with the San Francisco Fed and done some work on the farm his 81-year-old father still runs.

"When I retired I had no intentions of coming back to work," he said. "I guess I wasn't ready to retire."

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