A Reform Agenda Proposed for the Credit Union System

For Immediate Release:  April 27, 2011
For More Information:  Alexandra Gekas, Callahan & Associates, (800-446-7453),

America has never needed credit unions more. However, systemic reform is necessary to fulfill the mission set forth by Congress and to satisfy the growing needs of members.

Reform would divide NCUA’s responsibilities into three independent bodies — a regulatory body (modeled after the OCC within the Treasury), the insurance fund, and the Central Liquidity Facility.

The April issue of The Callahan Report presents the reasoning as well as the methodology to shape reform. It also includes actions individual credit unions and the industry in its entirety can take to support the cooperative financial model. Topics include:

  • Creating a 21st century credit union system: The process starts with establishing an office of credit union administration within the U.S. Department of the Treasury. The opportunity to address a fundamental flaw in the cooperative structure is ready and available. Credit unions can use their pent-up energy to take action now using options that are already in place.
  • Re-establishing the role of the Central Liquidity Facility: Between the creation of the Central Liquidity Facility (CLF) and the Great Recession, the CLF lost its ability to respond to credit union needs in the way it was designed to. This is not a management issue; it is a structural flaw the credit union system can correct.
  • Restoring cooperative confidence through a national cooperative insurance fund: Today the National Credit Union Share Insurance Fund (NCUSIF) is used as a fig leaf for regulatory failures. There is an inherent conflict when the regulator claims to be acting to protect the fund yet its own regulatory shortcomings are an integral part of the problem.

“The financial system of the nation is at a very promising point,” says Chip Filson, Callahan Report contributor and president of Callahan & Associates, the firm that produces The Callahan Report. “Economic recovery is bringing business opportunities and loan demand. Higher earnings will restore capital and, more importantly, ‘institutional self-confidence.’ But the final shape of the system is still being debated.”

In addition to the proposed reform agenda, and as part of a Freedom of Information Act request, April’s issue of The Callahan Report also includes a listing of the 25 highest paid NCUA employees for 2010 and the current salaries for the 25 highest paid NCUA employees for 2011.

# # #

About The Callahan Report

The Callahan Report is a monthly publication available to subscribers in print and electronic formats. Now in its 20th year, the report focuses on strategic concepts, thought-provoking ideas, and regulatory trends in the credit union industry. Visit to learn more.

About Callahan & Associates

Callahan & Associates is a Washington, DC-based firm specializing in financial publications, software development, strategic planning, and investment management for credit unions. Visit to learn more.

More News