Inclusion: The Communication Connection

by Rick Metsger, NCUA Board Member

Lucas Jackson—known as Cool Hand Luke to his inmate fraternity—stood erect, his feet bound with chains, staring steely eyed at the prison captain who controlled his destiny. “I wish you would stop being so good to me captain,” Jackson said sarcastically. Denied the words of contrition he demanded, the captain struck a vicious blow, sending Jackson reeling to the ground. He then angrily proclaimed, “What we’ve got here is failure to communicate.”

Communication: How can one word have a propensity to be so miscommunicated? The captain’s idea of communication was issuing directives. Cool Hand Luke’s response was delivering defiance. Luke certainly understood the captain’s authority, but he never granted him power.

It’s incumbent on all of us to understand that fundamental difference in the conduct of our daily lives. Directives represent only part of the communications matrix. Directives achieve the best outcomes when the recipient grants power to the authority.

Whether we are dealing with our children, friends, coworkers or the public at large, effective communication will, in the long run, be ultimately measured by the quality of the results. Nowhere is this more visible than in the conduct of public policy. Effective communication requires listening, acknowledgement, consideration and response. Combine these four pieces together and you get inclusion, the arc welder that binds power with authority. Inclusion is central to the productive relationship of the governed with those entrusted to govern.

This principle is especially true in the making of laws and issuance of regulations. All parties may not concur with the outcome, but it is essential that the process of inclusion be embedded in reaching that outcome.

When I became NCUA’s Chairman in May 2016, many said an evenly divided Board could not function and that the agency would be in a holding pattern until a new President was elected and a third Board Member was appointed and confirmed. I knew there was work to be done and that wasting eight months, a year, or more made no sense. My colleague, J. Mark McWatters, the agency’s new Acting Chairman, and I were determined to prove the skeptics wrong, and we did. Listening, and actually hearing each other, and stakeholders, was the key to that success.

From May 2016 through January 2017 we:

  • Invited comments on revisions to our Call Report and Credit Union Profile data collection;
  • Finalized guidance and began implementing a rules-based and less prescriptive and less burdensome member business lending rule;
  • Began a series of public briefings at Board meetings on emerging issues;
  • Resumed and greatly expanded agency budget briefings so stakeholders could review and comment on budgets before they became final;
  • Revised, and made more flexible, our examination schedule to focus on the biggest threats to the Share Insurance Fund;
  • Modernized our field-of-membership rules to give consumers greater opportunity to join a credit union; and
  • Issued an advance notice of proposed rulemaking to collect the information and advice we need to develop a new rule on alternative capital.

This Board did not let the grass grow under our feet. The critical elements of our success were listening and engaging before acting, and harnessing the power and spirit of the Administrative Procedure Act to obtain constructive input from our stakeholder community to make our actions effective. We didn’t blindly implement every recommendation, but we carefully considered every comment, made responsible choices, and responded so those actions were transparent. We all accomplish more when we communicate effectively and work together to advance our common interest.

That is what credit unions and the cooperative movement are all about. Credit unions have earned a much-deserved reputation for communicating positively with their members in part, I believe, because they have not forgotten the importance of connecting with the things that matter the most to them and promoting a feeling of inclusion.

As a regulator and insurer of a system of more than 5,000 institutions and 106.2 million members, my commitment to inclusion is unwavering. The credit union community understands that no one benefits when there is, “a failure to communicate.”

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