Looking back, looking forward: A recollection and a prediction

A safe and sound credit union system and a strong Share Insurance Fund were the two goals I said were foremost in my mind when I testified before the Senate Banking Committee as part of my confirmation as Chairman of the National Credit Union Administration Board in 2008.

I cannot put into words what an honor it was to be nominated by the President of the United States to be the NCUA Board Chairman. Having the leader of the free world say he has enough confidence in you to run a financial services regulatory agency is inspiring. For that vote of confidence, I will be forever grateful to President George W. Bush.

My year as Chairman began with credit unions facing a major crisis with their corporate system. This crisis placed the survival of thousands of credit unions in jeopardy and, to date, has cost the industry $10.4 billion.

For me, the challenges I faced professionally that year were of a magnitude I had never experienced in my many years as a state regulator and attorney in private practice. I knew the problems had to be immediately addressed and solutions quickly put into place if the credit union industry was to survive a financial nightmare.

I was fortunate to have a Board that realized the seriousness of the situation and a staff who understood it was going to take a lot of hard work to accomplish what needed to be done.

We were faced with an industry that had not previously experienced such turmoil and did not immediately understand what had happened and why. It took time, and honest and open communication before credit unions understood the magnitude of the problem, the costs to fix it and the time it would take. Once they did, credit unions did what they typically do: They faced the problem, accepted the solutions, paid the cost and saved the system for more than 96 million credit union members.

Needless to say, that first year was one I will never forget, nor will anyone else who was a part of it.

The balance of my term may not have been as exciting and challenging, but it certainly was as productive. We formed the Office of Consumer Protection and the Office of National Examinations and Supervision. We created and put into use a new examination manual to better ensure fair and consistent exams across all regions. Years of legal efforts came to fruition with more than $1.75 billion being recovered so far from those that helped cause the crisis. We drafted new corporate rules and gave authority to credit unions to engage in derivatives. Credit union membership also increased and many experienced record earnings.

Although the number of credit unions today is far less than in years past, it is encouraging to see that the industry continues to grow. It now has more than 96 million members and assets totaling $1.06 trillion. It is hard to believe that something that started so small has grown so big.

What started as an idea to help one another meet every day financial needs has grown into an industry that is capable of helping members grow their wealth and improve their standards of living. Through the years, credit unions have fought off competition, provided needed financial services products, resisted attacks in the halls of Congress and in state legislative bodies, adapted to the continued growth of regulation and withstood the financial crisis that saw the downfall of many other financial services providers. Credit unions met the challenges they faced head on and were victorious in their endeavors.

However, challenges remain. Interest rate risk, cyber security and competition, along with a continued avalanche of regulation, are some of the foreseen challenges. How the industry’s institutions meet and handle these challenges will determine who survives and can continue to serve their members’ needs.

I urge all of you to accept the challenges that lie ahead. Vigorously pursue and put in place the solutions that will enable you to overcome and successfully move forward to success in the future. The path at times may be difficult, but the rewards will be worth the hard work.

With a philosophy of people helping people, with slogans like “members first” and with a creed of “not for profit, but for service,” the tradition of true cooperative financial services will live forever.

I am grateful and proud to have worked with so many dedicated individuals at NCUA, the national trade organizations, NASCUS, the Defense Credit Union Council, the African-American Credit Union Coalition, state leagues across the country, credit union offices and tens of thousands of dedicated credit union employees and volunteers.

To all of you, I extend a sincere thank you for your help and support during my tenure. It is something I will never forget and for which I will be forever grateful. I look forward to continuing to be a part of the industry and helping it to continue to grow and prosper.