5 to 4

Five to four. Sounds like the score of a baseball game right? Well, it is not as simple as that, but rather it refers to an outside-the-box idea to enhance the efficiencies within the National Credit Union Administration.

Five refers to the numbers of regions NCUA currently has in its national structure. Four represents the number I believe it is time to work towards. The last time NCUA consolidated its regions was in 2004 when it went from six to the current five. When that took place on January 1, 2004, there were 9,639 federally insured credit unions. On April 1, 2014, that number stood at 6,491, a significant decrease in credit unions across the country.

To be fair, we must also point out that during that same period credit union assets increased from $610 billion to $1.1 trillion; membership from 82.4 million to almost 100 million and deposits from $528 billion to $943 billion. All of these are significant numbers for the remaining credit unions across the country.

So while credit unions have declined in number, the size and complexity of those that remained grew significantly.

It can only be considered a best practice when a federal agency steps back and looks at itself to see what changes need to be made and how it can do its job better.

Over the past six years I believe NCUA has done just that in reviewing its personnel needs and bringing in fresh eyes to improve its operations. In addition, the Board has continually looked at its regulations, listened to industry comments and tried its best to revise and change them to allow credit unions greater flexibility to meet the needs of members in a volatile economy. Changes in examination procedures and clarification of procedures have also helped provide an environment for credit unions to grow and prosper.

In addition to those changes, NCUA must look further into the future and, if deemed necessary, take bold steps. One bold step may be to begin the process of reviewing if the number of regions should be reduced by one.

Being realistic and keeping in mind that a reduction of one region will see some reduction in costs, one must also acknowledge that a reduction in personnel resulting from such a move most likely will only come from attrition. It has taken six years to put in place the personnel the Board felt was needed to maintain a safe and sound credit union system and maintain a strong insurance fund. They should not now, in any way, weaken their ability to regulate and maintain those goals.

They must however acknowledge, that they must shift, retrain and continue to educate their staff and place them where and when needed. The new Office of National Examinations and Supervision is a prime example. The Board restructured its corporate office to better align itself with the reduced number of corporates and take on the examinations of our largest natural person credit unions.

So while I feel the time is right to consider a reduction in regions, it must be done in the proper manner and fully maintain the integrity of the agency.

When such a major project is undertaken, it takes an enormous amount of time, effort and dedication to accomplish. Workloads between the regions must be balanced, locations of regional offices must be determined, the states within each region must be identified and NCUA must work closely with their union representatives to obtain their input and assistance. Those are just some of the considerations.

A project of this magnitude does not happen overnight. If begun now, a realignment and reduction could at the earliest be implemented by January 1, 2016, recognizing how slowly the wheels of change work in the Federal Government.

NCUA prides itself on always trying to do better, to correct mistakes they make, to be transparent as a regulator can be, to work with the industry they regulate to enable their continued success and to being as progressive and forward looking as they can be.

I believe 5 to 4 is another step in that direction.