“Measure twice. Cut once.” We’ve heard
the phrase often. Think before you act,
lest you waste time, money and alter
results. Efficiency and effectiveness are
inseparable outcomes when it comes to
Putting your trash, glass and plastic in a single bin is an
efficient way to dispose of household trash, but is not an
effective way to promote and expedite recycling. Handing out
free iPhones to all customers in celebration of the opening of
a new pizza restaurant may be very effective in generating
foot traffic, but is unlikely to be an efficient use of corporate
capital because the costs will exceed the benefits.
In government, as in business, balancing efficiency with
effectiveness can be the best way to achieve the desired results,
while simultaneously offering residual benefits to the balance
sheet, employee retention and customer satisfaction.
On Friday, Oct. 30, the NCUA Board and leadership staff
engaged with stakeholders in a productive dialogue focused on
how the agency can best fulfill its mission of protecting the
safety and soundness of the credit union system while easing
the compliance burden on credit unions. The Open Forum,
initiated by Chairman Debbie Matz, was another in a long
series of stakeholder outreach meetings convened by the
Chairman to share ideas and perspectives on regulatory issues
that face the system and the more than 101 million shareholders
who depend on their credit unions for financial services.
Stakeholders set the agenda, not NCUA. The issues of most
concern to credit unions were the examination process and
guidance and direction on upcoming regulatory changes. These
two topics were raised by 80 percent of the speakers. Both
topics relate to the goal of improving regulatory performance.
One of my principal goals for NCUA is to focus on how we
can maximize the quality of results through management
practices that are both efficient and effective.
As Bob Dylan noted, “times they are a changin’.” Technology
is at the heart of that evolution, providing new tools, new
opportunities and new challenges. If we focus on continuous
quality improvement, both credit unions and NCUA will be
compelled to question past assumptions and practices and can
work together to ensure we utilize new tools and
opportunities to maximize effective and efficient results.
Recent action by the Board in streamlining the ability of credit
unions to add associations to their fields of membership is one
example. Analyzing a decade of such requests, NCUA made it
clear that the protracted and in some cases laborious paperwork
exchange between the agency and credit unions was outdated
and unnecessary in an overwhelming majority of the application
submissions. Armed with this data and with suggestions from
credit unions, NCUA was able to develop a fast-track process
to expedite processing a dozen types of associations.
One issue presented at the Open Forum was whether NCUA
might return to an 18-month exam cycle for credit unions.
The issue of examination processes and procedures is ripe for
exploration, but analysis should not start by making a
conclusion and then working backwards to support an
outcome. That puts the cart before the proverbial horse. We
need to start by identifying the problem, and then determine
what the effective and efficient way is to meet the agency’s
mandate with minimal impact on credit unions.
As NCUA rolls out its new secure portal for exchanging data
between credit unions and examiners, and updating the
antiquated AIRES system and Call Report software and other
technology, we will evaluate how these new tools can be
integrated into our field examiners’ toolboxes to enhance
remote data collection and analysis—thus reducing the hours
needed onsite at the credit union while concurrently reducing
agency travel costs and improving quality of life for examiners.
This is a win-win for both credit unions and the agency.
Continuing consolidation within the system may also impact
the geographic distribution of examiners, resulting in a more
effective and efficient deployment of our assets.
Additionally, the agency can evaluate the impact that newly
implemented safety and soundness regulations may have on
reducing risk concerns that might support longer examination
intervals for some credit unions. When these evaluations are
completed and data generated and reviewed, we can then
evaluate how to utilize that information to streamline the
Our goal, however, should always be to meet our statutory
mandate to protect the safety and soundness of the system in
the most efficient and effective manner possible. While we
shouldn’t pre-ordain a conclusion, neither should we be
hesitant to implement change if the data validates the
reasonableness of such a change.
Let’s just be sure we measure twice.
A FUNNY THING HAPPENED ON THE WAY TO THE FORUM
BY RICK METSGER, VICE CHAIRMAN