Looking Back at 2016: A Year of Change to Help American Consumers

As 2016 winds down and we look towards the holidays and the coming new year, we can reflect on what was and what yet may be.

As a new Chairman, I hit the ground running in May with a personal goal of making a real difference for consumers and the credit union system during my time at NCUA.

To do so, my top rulemaking priority was to modernize our field-of-membership rules. Finalizing our member business lending rule was also important. The changes we have made, and the new changes we have proposed, will benefit millions of consumers. They will provide significantly more Americans with access to affordable financial services, as well as expanding credit opportunities to small businesses that create the majority of new jobs in our nation.

However, simply changing NCUA rules is not the only way, or necessarily even the best way, to improve the regulatory process to enable credit unions to better serve their members and communities in a safe and sound manner.

Continual Quality Improvement Initiative Delivers Results

Lesser discussed, but just as important, is my ongoing continual quality improvement initiative. All year long, I challenged both staff and the public to give us your best ideas on how to improve NCUA’s efficiencies and effectiveness and create a better culture of customer service wherever applicable. Under my continual quality improvement initiative, we have:

  • Increased budget transparency and made NCUA a peer leader among independent federal financial services regulators on this issue.
  • Set course for 2017 to provide extended exam scheduling flexibility for well-run and well-capitalized credit unions under $1 billion in assets.
  • Raised the eligibility threshold for a flexible exam cycle for state-chartered, federally-insured credit unions from $250 million to $1 billion, and increased coordination with state supervisors.
  • Begun modernizing our Call Report system and removed CUSO-related information from the Call Report now that our CUSO Registry is up and running.
  • Started modernizing our aging technology infrastructure, including piloting a secure online portal for credit unions and examiners to exchange exam-related information. It is scheduled to roll out to all credit unions in 2017. This also includes a long overdue upgrade to the Automated Integrated Regulatory Examination System, better known as AIRES, and the acquisition of better business-analytics tools.
  • Increased the number of credit unions certified by the U.S. Department of the Treasury as a Community Development Financial Institution by directly assisting in a new streamlined CDFI-application process for credit unions that will both reduce paperwork and make more of them eligible for grants, awards and technical support.
  • Renamed our Office of Consumer Protection to the Office of Consumer Financial Protection and Access to better reflect its functions, and started a process to improve the future ability of credit unions to track the progress of their field-of-membership expansion applications online.

We’ve also improved transparency by initiating policy briefings at Board meetings on key issues facing NCUA. The change allows stakeholders to learn about the facts and choices under consideration by the agency before we make key decisions. At these briefings, we’ve covered topics such as:

  • Cybersecurity;
  • Call Report modernization;
  • The Overhead Transfer Rate;
  • Interest rate risk management and the possibility of adding an “S” for interest rate sensitivity to future CAMEL ratings;
  • The staff-proposed 2017–2018 budget;
  • The Share Insurance Fund equity ratio and the range of possible premiums; and
  • Issues related to supplemental capital in anticipation of a potential advance notice of proposed rule making in 2017.

Future NCUA Board briefings are likely to be held on topics like:

  • The wind-down of the Temporary Corporate Credit Union Stabilization Fund and the disposition of the legacy assets;
  • NCUA’s examination appeals process;
  • The Enterprise Solutions Modernization program;
  • The new online Examiner’s Guide;
  • The Treasury Department’s Community Development Financial Institutions program;
  • Revisions to the payday alternative loan program; and
  • Ways to work with NeighborWorks America to better serve community needs.

Legal Recovery Successes Continue

This year, our legal team successfully obtained a major $1.1 billion settlement from the Royal Bank of Scotland. To date, the agency has recovered a net of $3.2 billion in legal settlements after paying legal fees. Every one of those $3.2 billion is one less dollar that credit unions would ultimately have had to bear themselves. What’s more, we are continuing to pursue multiple litigation efforts on behalf of the five failed corporate credit unions and the credit union system.

The proposed public Board briefing on the status of the Temporary Corporate Credit Union Stabilization Fund will provide all stakeholders with facts and insight into the issues and potential timing considerations for the Board about future refunds to credit unions.

In short, it’s been a very productive year. I fully appreciate the cooperation, ideas and thoughtful advice and support my colleague, J. Mark McWatters, has provided on all of the issues and initiatives I mentioned. When I became Chairman in May, some people wondered whether and how well the agency would function with a two-person board. Board Member McWatters and I have demonstrated that progress is possible.

It is personally rewarding for me to see how the NCUA Board’s and agency’s actions benefit American consumers through the credit unions that serve their members. If we— NCUA, our state partners and credit unions—each do our jobs well, America’s consumers, families and small businesses will be the true winners. I will continue to pursue these goals as we move into 2017.

In the meantime, I wish you and your family the best for the holiday season, as well as a happy and productive New Year.

— Rick Metsger