State of the Industry, from a Regulator’s Perspective

We find that the greatest advantage of a North Carolina state charter over a federal one is that the state charters deal with an agency that is accessible, local, and smaller than the federal agency.

 
 

This is a first-person perspective from Callahan's 2010 Credit Union Directory. 

North Carolina has 63 state and 43 federal charters. State charter asset range is $18 billion to $300,000. No state charters use private insurance.

With the downturn in the economy and the corporate stabilization issues putting more than normal pressures on credit unions, we are more vigilant than ever watching capital positions. One thing we have done to assist our state charters is give discounts on our supervisory fees. In the first half of this year we discounted the fees 50% for all state charters. Since June we have discounted them 50% for credit unions under $10 million and 10% for larger ones. We wanted to give greater discounts than the 10% but the state has elected to move our reserves to its General Fund, an unusual action since our division is 100% fee-supported and does not receive any monies from the General Fund.

My division has been working very hard to keep costs down and in doing so holding down our supervisory fees. For the last few years, we have used attrition to reduce our staff while maintaining high standards -- evidenced by our continuing NASCUS accreditation.

We find that the greatest advantage of a North Carolina state charter over a federal one is that the state charters deal with an agency that is accessible, local, and smaller than the federal agency. Because there are no multi-layered departments to navigate, the state charters can call us and receive answers and actions more expeditiously than a credit union dealing with NCUA. As a state agency, we are more agile and flexible.

With respect to FOMs we can again be more flexible and creative while remaining within the strictures of the statutes. Also, we know the changing conditions of the local economy. When we learn of a plant closing, hurricane damage, or other event in our state, we contact the affected credit union and see what we can do to help. We also understand that state charters have numerous compliance issues – with BSA, FACTA, etc. These are especially difficult on the very small credit unions and we work to help bring them into compliance.

Additionally, last spring we organized a "directors' college." This one-day symposium was very well received by CEOs and board members across the state. We had sessions on BSA, mortgage fraud, corporate governance, the corporates' situation and more. The session delivered to board directors the relevant information they need to address today's environment.

In North Carolina, we are also trying to help our state charters by pressing for capital reform on a national level. Like other states, North Carolina currently allows secondary capital. By working with all other state regulators through NASCUS, we are very visible on Capitol Hill, with Treasury and others to effect this significant change. While NASCUS and NCUA continue to work together, the trade associations, CUNA and NAFCU, are also addressing this issue. Capital reform must be resolved soon if they are to continue serving their members in the future.

This interview was included in Callahan's 2010 Credit Union Directory's Industry Participants section.  The section includes analysis of Corporate Credit Unions, CUSOs, Auditors and Regulators and Associations.

 

 

 

Jan. 25, 2010


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