Though some credit union CEOs continue to express dismay at NCUA in the wake of its announced plan to expand its budget — and many employees' pay — in 2011, others are saying pay increases are a needed investment to avoid having to pay higher costs down the road as a result of insufficiently trained and staffed examination teams.
Donna Bland, the president and chief executive of Golden 1 Credit Union in Sacramento, Calif., said she recognizes the "need for improved oversight."
"NCUA and credit unions should have the highest-quality examiners," Bland added. "If the raises that were negotiated within the contract and with the union's help to attract and retain top performers and high-quality examiners, then the industry and the insurance fund [are] better off in the long run. I feel [that] having a collaborative relationship with our examiners is a good thing to have because we all want strong credit unions. I want well-qualified examiners on my exam."
Bland said she supports the NCUA's creation of an office of minority and women's inclusion as a means to bolster diversity.
Similarly, Teresa Halleck, the president and CEO of San Diego County Credit Union, said she sees the need to hire and retain competent examiners as "participants in a cooperative insurance fund. It is in everyone's best interest that our federal examiners be highly qualified individuals who are able to understand the complexities of the markets and perform well during these turbulent times."
But one CEO who requested anonymity objected to the larger budget and the pay increases, which will range from 5% to 8%, saying that the agency has declined to accept that it "hold[s] an equal level of responsibility for the corporate mess."
"They regulated the corporates, they knew of these private-label mortgages, yet they didn't express any concerns at any time during the good times," this CEO said.
"They seem to forget that … the large corporates that failed, such as U.S. Central and WesCorp, had a full-time NCUA examiner assigned to each," the CEO added. "That said, the corporate management and boards did fail to adequately protect their balance sheets by holding such a large concentration of these investments."
Ken Burns, the president and CEO of Patelco Credit Union in San Francisco, said that, at first blush, the pay raises seem "high" but that he is reserving judgment in the absence of comparable data from other federal agencies and even accounting firms.
Credit unions "complain on the one hand that examiners are too inexperienced for the complex organizations we are running today," Burns said. "Anecdotal evidence seems to suggest that NCUA suffers from fairly high turnover, diluting their knowledge base."
Burns said hindsight offers some perspective. "Had greater expertise on the regulatory front led to reduced losses in natural person as well as corporate credit unions," he said.
"In hindsight, we'd pay 'whatever it takes' to provide that assurance," Burns added.