Credit Unions

Moderated by Scott Simpson, president of the Utah Credit Union Association

July 9, 2013

OLSEN: And the people who are coming out to do the onsite inspections, they don’t even know all the rules. And a lot of times you’re having to explain things to them.

LONDON: All this is to protect the consumer. But the consumer just isn’t being protected through all this regu-lation. It’s becoming more burdensome for them. They keep talking about simplification: we’re going to simplify this so that it’s easier to understand. Well, how do you simplify 3,506 pages? Start there. It’s really frustrating.

LUND: We all realize that a certain amount of regulation is necessary for consistency, for the good of a civilized country. But it’s out of control.

LONDON: You’ve got NCUA with their own internal regulatory environment, and then you have what Congress does and what they’re coming up with, and then you look at the CFPB. It’s just this thing that’s multiplying itself every time we pass a law or any time we do something there’s a new agency out there passing a new rule.

And with what the CFPB’s gone through, we’re going to get hit with that. And we’ve got NCUA that’s now jumped in and said, “GAAP doesn’t follow what we need to do, so we’re going to write our own rules for those.” It’s this mentality that just pushes it out.

And the consumer is coming to us and saying, “Why do I have to do all this?” The only people benefitting from that are the attorneys.

PAYNE: I think all of us, to one degree or another, are doing “risk-based compliance.” Am I 100-percent compliant with everything? No.

LUND: You don’t know.

PAYNE: So we take a look and say, “What’s the biggest risk? Which non-compliance will potentially give me the biggest problem?” And I start there. At the end of the day, the regulator can’t check every single thing. They don’t know all the things that are there. At the end of the day, you get a passing grade.

Are you perfect? Nope. Are you good enough? Yep.

ADAMSON: For me, years ago the regulators came in and looked at the big stuff. They looked at the stuff that really presented a risk. And then they missed in Utah—they missed the whole construction loan issue.      

Then the whole corporate credit union issue created an awareness for the NCUA. Because all of a sudden as we went through 2008, ‘09, ‘10, there was a period of time where I think the NCUA was afraid that they were going to go away. Now they want to prove that they’re going to be the strongest agency out there and they’re going to add value to the United States as a whole because they’re not going to allow the citizens to ever have to cover a credit union failure. With the banks, it was just a different situation and there was so much money involved that they actually got funding and the TARP money and all of that.

So then the NCUA hired these people and now they’re taking it down to the minutia of looking at policies and actually finding these little, tiny things, and they’re saying, “Just tweak this.” Or, “You don’t even have this policy.” When, really, in the scheme of things, it had nothing to do with risk. It had nothing to do with the financial institution failing. Because if a credit union fails, that hurts the movement.

NIELSEN: What the consumers don’t realize right now is the Consumer Financial Protection Bureau now has upwards of a thousand employees who every day are passing new rules. They are going to be impacted. Costs are going to go up. In the end, it’s not going to be good for the consumer.

A couple years ago it seemed difficult to find talent. Is that still the case?

ADAMSON: Before 2008, we had a really difficult time even getting full-time tellers because unemployment was so low. Then we went into a phase where our turnover rate dropped substantially because there weren’t other jobs out there, and we didn’t need to hire. We had no problem filling the positions that we needed once in a while. Now we’re getting back to a situation where it’s a little bit more difficult to get qualified candidates.

NIELSEN: The skills we need are escalating. Particularly when you go into the technology field and into the mortgage lending experience area, there is a lot of competition where we have to be protective of our employees because people pick them off.

OLSEN: Have you had to increase pay to keep people?

NIELSEN: We have to watch the market very carefully. The pay level is increasing, particularly in the technology and mortgage area.

LUND: The skills we look for are evolving—more sales-relationship-oriented people that can communicate and have a good relationship with people.

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