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NCUA Board Member Gigi Hyland Addresses NACUSO Annual Conference Attendees

Las Vegas, Nev. (April 29, 2008) – As part of their 2008 Annual Conference held at the Wynn Las Vegas Hotel, Tuesday, April 29, The National Association of Credit Union Service Organizations (NACUSO) convened general sessions for the 400-plus attendees highlighted by keynote speakers Gigi Hyland, NCUA Board Member, and Dennis Dollar, former Chairman of the NCUA Board. Dollar is now principal partner at Dollar Associates, LLC, Birmingham, Alabama.

NACUSO president/CEO Thomas C. Davis opened the morning session by encouraging attendees to focus on the positive. “There is a need for CUSO members to drive credit union success,” Davis noted. “That’s why we are in business.”

Summarizing the current projects, activities, and focus of NACUSO’s National Center for Collaboration and Innovation, Davis highlighted NACUSO’s enhanced Web site featuring its new blog. “The National Center continues to serve as a primary resource of information for connecting credit unions and CUSOs to help you collaborate, “Davis said. “Our online NACUSOMatch Directory of CUSOs and the new blog journal are two current resources available to anyone interested in collaboration, or considering CUSO solutions to fill a credit union need.”

Speaking next at the morning general session, NCUA Board Member Gigi Hyland addressed key regulatory issues, including the NCUA’s letter on third-party relationship evaluation. Hyland related the letter as saying, in effect, there’s no doubt credit unions need third-party vendors to deliver products and services to members; the reality is to focus on what your credit union needs to meet strategic goals when using third-parties. She also encouraged credit unions to improve strategic planning, ensure balance in third-party contracts and to perform due diligence, along with ongoing reviews and monitoring. As for CUSOs, Hyland recommended they create a working process of knowledge for regulators to understand both what CUSOs do, and perhaps more importantly, what CUSOs don’t do for credit unions.

Capping the morning general assembly, keynote speaker Dennis Dollar, who is also working with NACUSO to develop a political action agenda and regulatory advocacy program, provided insights into where he believes the credit union industry will be in the year 2020. Looking into the future, Dollar predicts that credit unions will be the dominant community-based financial institutions, in most communities, because bank merger mania will create more nationwide “mega-banks” leading to an increased disconnect with local citizens who seek a more personal touch. Credit unions, specifically those with geographic FOMs, will fill the gaps and meet the needs of the community.

Dollar then outlined the future requirements and issues he foresees, before credit unions will dominate the community banking sectors, in the year 2020.

  1. The addition of a risk-based capital system, implemented to bring credit unions into the regulatory mainstream.
  2. Field of Membership rules will still exist, but will be safety and soundness driven.
  3. Credit union board directors will face enhanced fiduciary responsibilities, requiring continuing education, and some type of director compensation will be authorized for their increased responsibility.
  4. Credit unions will retain Federal tax exemption status – UBIT could drive some credit union service offerings to CUSOs for wider markets.
  5. Credit unions political activism must continue, and be kept strong.
  6. CUSOs will exceed the number of credit unions, likely years before 2020.
  7. Credit unions will face greater regulatory pressures, not less, and this will drive mergers. Over-regulation will be the leading small credit union killer.
  8. Credit unions will cooperatively market nationwide. Branding credit unions in general will be recognized as more important than branding specific individual credit unions, emphasizing local member-ownership but with nationwide brand recognition, similar in nature to ACE Hardware’s branding strategy.
  9. Shared Branching will be a key credit union differentiator, with virtually all credit unions participating nationwide, thus reinforcing a national branding campaign. Future “mega-banks” will never cooperate to such a branching level.

“Where America’s credit unions find themselves in 2020 will be determined by their vision in 2008, and the decisions that accompany the vision,” Dollar summarized.