Attorney David Reed had a simple question for directors attending the CUNA Board Roundtable: “Do you read the mission statement of your credit union at each board meeting?”
Why that’s a critical action every board should take, according to Reed: “By definition, it’s the reason you show up for meetings, the reason your staff shows up for work. By definition, we all share the same mission—we exist for our members, no matter what terms you use: member-owned, member-controlled, run for the benefit of members.
“And if you want to offer products and services for your members,” Reed continued, “you have to do it within the rules and regulations. Compliance is the transactional lubrication that delivers products to our members. Your mission statement does not just say you’ll work with members on their good days. It means you’ll help them throughout their life.”
“It’s easy to love somebody who loves you,” he explained, “but difficult to love those who hate you. In other words, it’s easy to love someone with an 800 credit score but not those who have 540 scores.”
So who else in your marketplace is marketing to your members, he asked? “You hope you can be a beacon for members, which is most useful in stormy weather. And regulators want us to run our business without risk because safety and soundness means the insurance fund will be safe and sound. NCUA is our primary provincial regulator but it’s also our insurance fund.
“NCUA views your operations as risky. This includes everything you do: loans, loan participations, serving new members, member business loans,” Reed said.
That’s why Reed described the pace of regulations as a fire hose, rather than a drip. “The Consumer Financial Protection Bureau is pushing information out to consumers all the time via the Web—using complaints as a feedback mechanism. In truth, the CFPB examines only five credit unions, but every examiner is reading all of its rules and regulations.”
Reed’s advice for dealing with examiners who might question your operations: Risk is bad but we view it as opportunity, he said. “When you’re questioned, you have to say, 'Here’s the regulation; here’s how we interpret it.' You have to be strategic enough that you interpret the regulations on behalf of serving your members."