By Buddy Gill
You may have seen the recent headlines about how CUNA and NAFCU have taken opposing sides on whether and how NCUA should close the Temporary Corporate Credit Union Stabilization Fund and start issuing rebates to credit unions. Each trade group is digging in on their opposing positions.
Let’s take that new development as an opportunity to make a larger and important point about effective advocacy with federal or state regulators. When giving speeches on effective advocacy techniques, I often get asked “how can we be most effective when engaging NCUA?” I have a unique perspective of what works and what doesn’t, having served as a political consultant to the credit union movement from 1997 to 2003, running governmental relations for the Texas Credit Union League from 2003 to 2011, and then working as a senior advisor to two NCUA chairmen from 2011 to 2016.
Maybe you are a CUNA Hike the Hill or NAFCU Congressional Caucus veteran. If so, you’ve visited Capitol Hill offices, and you’ve had to present your case to a federal policymaker and their staff. You understand they ask for and want reliable information and data to back up your positions, not just emotional stories or regurgitated talking points. You may know they judge the messenger’s demeanor, actions, and motivations as much as the message conveyed.
So, as I point out in my speeches, you wouldn’t do press releases back home vocally criticizing your member of Congress repeatedly, then later march into their office and demand that they help you on an issue, would you? Good luck with that approach; it’s generally ineffective, and neither fosters trust nor builds long-term professional working relationships needed for policy success. After all, what policymaker would be receptive to listening to or agreeing with someone who reflexively and continually criticized the votes or actions they took?
Truly Persuading, or Trying to Score Points?
During my prior tenure at NCUA, the chairman and board would get a constant stream of letters from trade associations advocating their views. Many letters were professional and well written, and provided data and suggested policy rationales, thus adding input value to the NCUA decision-making process.
But there were also times I was truly appalled at the tactical tone in the approach of some letters sent to NCUA. Were those kinds of letters written to persuade the NCUA Board and staff? Or were simply “press releases” to their members masquerading as letters to NCUA? These transparently “posturing” letters would arrive at NCUA without any good faith phone call discussions beforehand, seeking to understand what the agency was doing or why on the topic at hand.
In fact, in 2011, I distinctly recall a now-retired NCUA executive telling me about the change in approach over the years: “Used to be, if there was a problem, someone like Dave Chatfield (former California League CEO) would pickup the phone and call me, we’d hash it out, and we’d understand each other at the end of the call, try to find a way to work it out, and move forward. Now, some trade groups finds it easier to do their government relations with NCUA via press release. Heck, sometimes we’d even find out about a letter to us from reading the trade press clips before NCUA even physically received the actual letter! Kinda says it all, doesn’t it?”
Understanding NCUA
First, NCUA should neither be approached nor treated like a trade association. Understand that a regulator’s job is to serve the public interest. NCUA Board and staff have a duty to listen carefully to the entities they regulate and other stakeholders through the comment process, but also have a sworn duty to implement the laws Congress writes to meet the agency’s mission, and put the overall public interest ahead of private or narrow pecuniary interests.
Knowing both the philosophical views and track record of both Chairman J. Mark McWatters and board member Rick Metsger as I do, some allegations circulating that NCUA proposed this plan to close the stabilization fund early and then simultaneously raise the Share Insurance Fund equity ratio to 1.39% is really a calculated stealth move to redirect credit union money for it’s own budget is utterly laughable. I personally would not be caught dead advocating such a view point, especially if you value your own credibility with your regulator.
Understand too that NCUA has no long-term interest in being a perpetual manager of the legacy assets of the five failed corporate credit unions past 2021. Rather, the NCUA Board will have taken its position, based on its mandated mission, legalities, accounting restraints, data and evidence, to try to get early rebates out to credit unions. That is to be commended, truly. But to get refunds out sooner rather than later, the board has preliminarily concluded that the share insurance fund equity ratio would need to go up to absorb the stabilization fund, for at least a time, to 1.39%. That can be debated certainly, but understand too that time is running out if any refunds are to begin in 2018.
Your Tone Can Affect Your Future
Returning to the recent headlines, time will tell which national trade association’s view and approach – if either – will prevail at NCUA on the issues of winding down the corporate stabilization fund and providing rebates to credit unions in 2018 or instead in 2021. Perhaps a trade association’s board of directors, or some segment of its members love strongly worded letters forcefully questioning or opposing NCUA’s actions, but I would caution them against confusing feel-good public relations activity with getting real results and final outcomes sought.
The bottom line: whatever your position on the policy issues involved, make sure you are engaged with your trade association and advocate your views – but understand, the tone and voice you and especially your trade association uses to advocate to NCUA can influence whether you ultimately get the final outcome your credit union wants.
Buddy Gill is a former senior policy and external relations advisor to two NCUA Chairman. He can be reached at buddygill@mac.com.