Two regional offices, including the one in Albany, charged with regulating credit unions in Massachusetts, Rhode Island, Connecticut, Maine, New Hampshire and New York would close under the National Credit Union Association’s recent announcement to restructure its operations.
However, credit union advocates and the top credit union regulator say the move is needed and will reflect better efficiency, responsiveness and cost-effectiveness as the industry landscape changes.
“The time has come for the NCUA business model to change,” Board Chairman J. Mark McWatters said in a statement. “Positioning the NCUA to meet the changing demands of the credit union system we regulate in a transparent and fully accountable manner while promoting efficiency and effectiveness is essential. Re-evaluating our operations is integral to fulfilling our statutory responsibilities to protect the deposits of the nearly 108 million credit union members while maintaining the safety and soundness of the Share Insurance Fund and the viability of the credit union system.”
Paul Gentile, president and CEO of the Cooperative Credit Union Association, which advocates for credit unions in Massachusetts, New Hampshire, Rhode Island and Delaware, called the restructuring effort long overdue.
He also said it would create a more effective regulatory environment that embraces a virtual exam model and more remote work to reduce costs.
“Getting the exam team back down to pre-recession levels, reducing travel and reducing on-site exams are some of the key ways to save money,” he told Banker & Tradesman. “The consolidation of offices mirrors the changing demographics of the credit union system and recognizes the need to streamline and reduce costs without sacrificing safety and soundness. As the system changes it’s imperative that NCUA change with it.”
The restructuring effort would consolidate the NCUA’s five regional offices into three by closing the Albany, New York and Atlanta, Georgia offices and eliminating four of the agency’s five leased facilities.
“Let’s remember the agency has a very large IT capital spend budget for the next two years, so going more remote is consistent with that budgetary move,” said Gentile. “They ca’’t do both. They can’t have that IT spend and maintain the current infrastructure.”
The initiative, which the NCUA began late in 2016, would also create an Office of Credit Union Resources and Expansion by redefining and realigning chartering and field-of-membership, credit union development, grants and loans and minority depository institutions programs.
In addition, it would restructure the Office of Examination and Insurance into specialized working groups, and realign the Asset Management and Assistance Center to include changes to the servicing business model and moving to a financial supervisory structure.
The NCUA also plans to eliminate agency offices with overlapping functions and improve functions such as examination reporting, records management and procurement.
The proposed plan is expected to reduce the agency’s workforce gradually.
NCUA Board Member Rick Metsger said in a statement the restructuring would come together over a “period of years.”
Additional details of the agency’s plan, including projected cost savings, will be available at the upcoming fall budget briefing. The last time the NCUA restructured was in 2003.
