MONTREAL, Quebec–The director of NCUA’s Region 1 said he believes credit unions are now headed in the right direction when it comes to the financials. But the good news did not keep credit union reps from nevertheless peppering him with some tough questions about the agency’s practices.
Larry Blankenberger, who worked in credit unions before joining the agency in 1987 and who now heads NCUA’s Albany, N.Y.-based Region 1 office, told a breakout session at NAFCU’s annual meeting that he is a firm believer in the work done by credit unions, and is an especially big supporter of volunteers.
NCUA Region I Director Larry Blankenberger speaking to NAFCU meeting in Montreal.
Speaking to a theme of the view from his office (he included actual photos of that view as part of his presentation), he said, “We see a lot of really good things, we see some bad things, occasionally, but a lot of what we see we can’t divulge. We see what works, what doesn’t work, and we try to share that knowledge.”
He said the agency doesn’t ask credit unions to do a lot of things it does itself, such as quality control reviews and undergoing independent audits. And before anyone could ask, he acknowledged that “a lot of our examiners don’t have a lot of years on them. They aren’t used to what I’m used to, perhaps, and we’re trying to bridge that gap. There can be differences in communications and we’re working on that.”
His audience, which was composed almost entirely of CU board members, had some tough questions for Blankenberger. Below is a look at those questions and how the Region 1 Director responded:
Q: We hear a lot of discontent with NCUA, and one of the reasons that seems to stick in the craw is why is it that we as the people paying for NCUA don’t have transparency into the budget process? I want to know what you, sir, can tell me about that. Why not send (NCUA Chairman Debbie) Matz here? (Matz was, in fact, scheduled to speak the following day.)
Blankenberger: We spend a lot of time on our budget. We are examined and audited by other folks, too. We have controls in place. I can’t speak to the national issues. A lot of our budgeting process is pretty much fixed. We go to Credit Union A, to Credit Union B. I think at the regional level we do a good job of trying to be good stewards. When we put on more specialists, we said, ‘We can’t increase budget much in this process.’ All those specialist positions were examiner positions that we crossed over.’ Yes, they get paid a little bit more, but I think there’s more bang for the buck.’
Q: Could you explain the difference between an examiner and a specialist?
Blankenberger: An examiner is assigned a district of 25 to 30 credit unions, perhaps fewer. They go to the credit union, write the examination report. A specialist will be a part of their team. For example, if we’re going into a credit union where we’re looking at it from a risk perspective with MBLs, for instance, the MBL specialist would feed information back to the examiner. Generally speaking the specialists do not write the examination reports, they stay in their specialty area. The examiner is more of a generalist.
Q: The balance sheets in credit unions can fluctuate so much over the course of a month. Has there ever been any thought of modifying the end-of-month period dates to look at averages, instead?
Blankenberger: We have dialogued on those types of things. But the more data mining you do the more it modifies the call report process.
Q: What about changing exam process away from all the on-site time and using technology to reduce the time spent on site?
Blankenberger: We are looking at more off-site examination. That is something we would like to do to a degree. But the other side of that tells me is the best way to work with you all is not to spend too much time with that computer and data, but to dialogue with you all. So there is a yin and a yang here. We don’t want to be in your way, but we also want to have dialogues so you are comfortable with us.