There are two kinds of presents: the kind you love to get, like a remote controlled helicopter, and the kind you need, like socks. With the Christmas season officially upon us, here is my list of presents the credit union industry needs even if they don’t want them.
More regulators. Specifically, the existing three-person NCUA board needs to be enlarged to at least 5 members. Let’s face it a three-member board makes no sense. If we learned anything this year, it’s that new blood brings new ideas to the regulatory process and an infusion of more people would bring more ideas. Plus, many of the issues being discussed are too important to be decided by just two people. One more thing, a three-person board needlessly stifles debate by making it difficult for board members to discuss things without violating open meeting laws. By the way, we should also create a rule-making board for the CFPB. One person should not have near dictatorial power over consumer regulation in this country.
More mergers. I am not talking about the mergers where the big guys on the block subsume a smaller counterpart whose CEO has decided to resign after a gazillion years of selfless service to the industry. What I want to see is more voluntary mergers of three and even four smaller credit unions. This approach will allow the smaller participants in an industry to obtain the needed economy of scale without simply handing over their membership and unique corporate values to the big guys.
More Keith Leggetts. This one goes into the “if you can’t beat them join them” category. With his Credit Union Watch blog he started before retiring from the American Bankers Association, Keith specializes in following the credit union industry as closely as possible, with a special knack for putting facts in their most negative light. Credit unions too often bring a scissor to their gun fight with the banking industry. We need to have at least one banking industry expert keeping an eye on banking developments so that we can better explain to the public and Congress what it is the banks are doing and why it could potentially hurt both credit unions and consumers of financial products and services.
More silence from the FED Ben S. Bernanke did many good things as Chairman of the Federal Reserve Board, but his effort to provide greater stability to the financial markets by more publicly giving forward guidance on the FED’s likely rate decisions has been an abysmal failure. The policy hasn’t created greater financial stability, but more instability – recall the Bernanke Bounce. The greater openness of the FED has simply pulled the curtain away from the Wizard of Oz and the result is as discouraging.
More guidance on guidance. Everyone wants more guidance, but no one has the same answer to these basic questions. Are guidances as binding on credit unions as regulations? How exactly do you comply with a guidance that lacks specific requirements without complying with each of your examiner’s wishes? This might seem like dry stuff, but with the industry taking a headlong leap into guidance-based regulation, these questions have to be answered sooner than later.
More lawyers. Credit unions have generally stepped up their game when it comes to regulatory advocacy. The next step is to step up their game when it comes to legal advocacy. I’m not saying that every regulation with which we disagree should be the subject of a lawsuit, but just as legislators and regulators shape our environment, so too do lawyers and judges. It’s time to more frequently use the court system to advance the industry’s needs.