Berger Leadership Blog

Sep 08, 2017

Stand on fact and principle – no matter the circumstances

Dan speaking at AC

As a leader, sometimes your values and stances -“ even when based on fact and principle - aren't always the most popular or understood.

Forbes' Amy Rees Anderson puts it this way: "True leaders know who they are and what they stand for. They know their values and the rules they will abide by, regardless of the circumstances they face."

She goes on to add that true leaders also "take all the facts into account, keeping a long-term view in their approach, with the desire that any fixes they put in place today will be to the benefit of the organization and the people both now and in the future."

I couldn't say it any better myself.

This summarizes exactly why NAFCU has taken the position it has on the NCUA's proposal to close the Temporary Corporate Credit Union Stabilization Fund (TCCUSF). We stand on the fact that credit unions receiving all their money back from this fund will better benefit the industry than if they were to just receive a small share, as is currently proposed.

In an email to association member credit unions this week, NAFCU Board Chair Richard L. Harris, president and CEO of Caltech Employees Federal Credit Union, reiterated NAFCU's stance on this proposal. I thought he summed up our position well, and I wanted to share his points, in his words, with you:

  • NAFCU's top priority is to get credit unions ALL of their money back - not just a portion. Under the NCUA's current proposal to merge the TCCUSF with the NCUSIF, credit unions would only receive about 15 percent of their original assessments. The NCUA would retain almost $1 billion for itself -“ money that rightfully should be returned to you.
  • The NCUSIF's normal operating level (NOL) does NOT need to be increased. The NCUA's plan seeks to increase the NOL from 1.3 percent to 1.39 percent - the highest level in its history. The current TCCUSF closure proposal also doesn't provide any assurance that the NOL increase would be unwound in future years. On the contrary, it sets a precedent for retaining excessive funds in the NCUSIF which future NCUA Boards are likely to follow. The credit union industry survived the Great Recession with a 1.3 NOL, reinforcing the fact that the NCUSIF is not at risk by maintaining the NOL at its current level.
  • The NCUA does NOT need to charge a premium this year. A premium charge is only required under the Federal Credit Union Act if the equity ratio falls below 1.2 percent. NAFCU's models -“ and even the NCUA's own base-case models - do not project such a fall to occur for years. The NCUA asserts that by merging the funds, it won't need to charge a premium in 2017, but that's the case regardless of a merger.

While a complex issue, I, the NAFCU Board of Directors and fellow member credit unions, have no doubt that we are standing on fact and principle. NAFCU has always stood for the betterment of credit unions and the industry -“ we've done this for 50 years and will continue to do so now and well into the future.

Follow me on Twitter (@BDanBerger).