CUNA Regulatory Comment Call
June 7, 2002
NCUA’S Draft Strategic Plan For 2003-2008
Executive Summary
Under the Government Performance and Results Act, the National Credit Union Administration and other federal regulatory agencies are required to develop a strategic plan, as well as an annual performance plan that explains how the agency will implement is strategic goals. The plans are provided to Congress as well as to the Office of Management and Budget.
NCUA has issued for comments its strategic plan for the years 2003-2008. Here is the link to the proposed plan: http://www.ncua.gov/ref/stategicplan/StrategicPlan2003-2008-forcomment.pdf. Comments are due to the agency by July 12, 2002. CUNA’s Examination and Supervision Subcommittee will soon be meeting with NCUA to discuss the plan. In the meantime, please share your comments about the plan by emailing them to CUNA SVP and Associate General Mary Dunn at mdunn@cuna.com.
Key Aspects of the Plan
While it is tempting to provide only a brief synopsis of NCUA’s Strategic Plan, credit unions and leagues will not be able to evaluate the plan without knowledge of some of the significant elements of the plan.
NCUA’s Strategic Plan 2003-2008 consists of two parts. Part one addresses NCUA’s long-term goals and the steps it plans to take to implement those goals. (NCUA notes that the goals “are subject to change and are considered for long-term planning purposes only, until formally approved by the NCUA Board.”)
Part two contains several appendices, which are intended to provide greater details for the development of the agency’s strategic plan, including NCUA’s Strategic Picture and Environmental Scan, Human Capital Management, Information Technology and Strategic Program Evaluation. (Unfortunately, several important supporting documents are not included in the draft, such as IT Resource Management and others.)
The plan includes the agency’s vision and mission statements, as well as its statement of values. These are:
Vision Statement
Ensure the cooperative credit union movement can safely provide financial services to all segments of American society, enabling credit
unions and their members to thrive in the twenty-first century.
Mission Statement
Our charge is to foster the safety and soundness of federally insured credit unions and to better enable the credit union community to
extend availability of financial services for provident and productive purposes to all who seek such service, while recognizing and
encouraging credit union’s historical emphasis on extension of financial services to those of modest means.
We do this by managing the share insurance fund in an efficient and prudent manner, and establishing a regulatory environment that encourages innovation, flexibility, and continued focus on attracting new members and improving financial service to existing members.
Values
Integrity – This is the underlying value in everything NCUA does as an agency and as individuals. Integrity is communicating openly and
honestly, delivering what we promise, and doing the right thing, not merely doing things right. Integrity directly addresses the concepts of
honor and duty, which are mindsets the American public has the right to expect from us as public servants.
Forward-Looking – NCUA continuously scans the horizon, plans how to address, and acts upon emerging issues sufficiently in advance to provide timely, cost effective solutions where warranted.
Responsiveness – NCUA strives to provide policies and procedures that are effective, yet facilitative measures - preserving the overall integrity of our credit union movement.
Teamwork – Teamwork inspires, motivates, and guides NCUA toward it goals. It was from a group identity – commitment, team spirit, and a willingness to work together for the betterment of all members - that credit unions were created and it is that identity which sustains us today.
Assessing Results
The plan also describes how the agency will evaluate its progress toward meeting its strategic goals. The plan states:
To make the plan effective, results must be assessed and corrections, if applicable, made. NCUA Strategic Plan 2003-2008 represents a phase of that assessment and the next step in NCUA’s evolution. The assessment is results-oriented, looking at progress made toward achieving established performance goals and measures, and determining the strategies needed to meet the goals with a forward focus.
Strategic Goals
Here is the list of the agency’s strategic goals, as stated in its proposal:
Strategic Goals, Program Activity
Strategic Goal #1
Promote a system of financially healthy, well-managed federally insured credit unions able to withstand economic volatility.
Outcome Goals
1.1: Create a regulatory environment that promotes effective risk management practices.
1.2: Resolve safety and soundness issues in a timely manner.
1.3: Promote effective planning to meet current and potential future financial challenges.
1.4: Promote healthy financial performance through effective and diligent management of the NCUSIF.
General Strategies:
- Complete the transition to full operational capability of a risk-focused examination process and risk-based scheduling system utilizing Subject Matter Examiners in their respective areas.
- Work cooperatively with the State Supervisory Authorities in their assessment of the financial and operational condition of federally insured state-chartered credit unions and in properly managing risk to the NCUSIF.
- Ensure NCUA continually reviews its regulations on a triennial basis providing credit unions with current effective regulatory guidance for risk management.
- Ensure NCUA continues to review and seriously consider all communications/input regarding the effectiveness of all regulations.
- Ensure examiners are trained to communicate effectively with credit union management throughout the entire examination process.
- Continue to issue Letters to Credit Unions, Regulatory Alerts, Technical Bulletins and other official communications as warranted on a timely basis.
- Identify any undue risk to the NCUSIF and react appropriately to mitigate this risk utilizing supervision tools currently available and under development, such as sophisticated models and off-site monitoring.
- Encourage the use of 208 assistance to minimize losses to the NCUSIF, when appropriate and consistent with the statutory authorization.
Annual Performance Goal 1.1 (These goals indicate how the agency plans to implement its strategic plan)
2003
1.1a: Review one third of NCUA regulations annually for needed changes.
1.1b: Complete the program evaluation phase of the transition to a risk-focused examination process.
2004
1.1b: (Changed) Implement full operational capability of the risk-focused examination process.
2005
1.1b: Deleted in CY2005
2006
1.1b: (Added) Evaluate and enhance the risk-focused examination process.
2007
1.1b: (Changed) Continue to enhance the capability of the risk-focused examination process.
2008
No change from year 2007.
Annual Performance Goal 1.2
2003
1.2a: Effectively monitor and assess the percentage of federally insured credit unions with long-standing unresolved problems that threaten
their safety and soundness.
1.2b: Effectively monitor and assess the percentage of critically undercapitalized federally insured credit unions (more than 2 years old).
2004-08
No change from base year.
Annual Performance Goal 1.3
2003
1.3: Ensure NCUA’s communication processes, including examinations, serve as effective means to provide credit unions with critical
and other valuable information.
2004-08
No change from base year.
Annual Performance Goal 1.4
2003
1.4a: Manage the NCUSIF in an effective and prudent manner to support credit union deposit insurance needs.
2004
1.4b: (Changed) Implement full operational capability of the risk management model.
2005
1.4b: (Changed) Continue to assess and enhance the risk management model.
2006-08
No change from previous year.
Strategic Goal #2
Facilitate credit unions’ ability to safely integrate financial services and emerging technology in order to meet the changing expectations
of their members.
Outcome Goals
2.1: Ensure that NCUA staff develops and maintains the necessary level of expertise to effectively identify, measure and monitor the
risks that existing and emerging financial service technologies pose to credit unions and the NCUSIF.
2.2: Provide a regulatory environment encouraging credit unions to safely integrate and operate existing and emerging financial
service technology and effectively manage the related risks.
General Strategies:
- Develop and implement a comprehensive program designed to provide initial and continuing education/training to subject matter examiner’s, examiners and SSA staffs. Include establishing a baseline, program testing, evaluation, and reassessment through an examiner survey.
- Enhance information sharing capability of Information Systems and Technology best practices among examiners, credit unions and trade associations through group meetings, regional intranet sites, and participation in sessions provided by the trade associations.
- Collect data from the call report and e-commerce exam work paper to identify the number of CUs engaging in e-commerce activity and the type of activity utilized (informational, transactional, interactive).
- Solicit input from the Information Systems and Technology subject matter examiner’s and from examiner staff to revise and update the e-commerce exam work paper used to identify and evaluate e-commerce risk.
- Redesign the e-commerce exam work paper to facilitate the collection of data. (Deleted in 2004)
- Use subject matter examiners in the examination and supervision of CUs engaging in e-commerce activity and to provide training to other examiners.
- Modify NCUA 110 to identify CUs engaging in e-commerce activity with an unsatisfactory level of risk. (Deleted in 2004)
- Identify problem CUs and reduce the number within a given timeframe.
- Provide appropriate guidance to CUs regarding developing technology plans, minimum due diligence expectations and best practices through annual letters to CUs, NCUA website information and links to other informational websites.
- Allocate staff and other agency resources based on identified e-commerce risks.
- Promote voluntary agreements for 3rd party e-commerce vendor reviews.
- Track e-commerce providers to monitor the volume and level of associated risk.
Annual Performance Goal 2.1
2003
2.1: Develop and pilot a training program for Information Systems and Technology subject matter examiners and SSA staffs.
2004
2.1: (Modified) Complete the program evaluation phase of the training program for Information Systems and Technology subject matter
examiners and SSA staffs.
2005
2.1: (Changed) Implement full operational capability of the training program for Information Systems and Technology subject matter examiners
and SSA staffs.
2006
2.1: (Changed) Continually enhance the training program for Information Systems and Technology subject matter examiners and SSA staffs.
2007-08
No change from previous year.
Annual Performance Goal 2.2
2003
2.2: Enhance the credit union community’s use and understanding of technology plans, due diligence expectations and best practices.
2004
2.2b: (Added) Reduce the number of credit unions engaging in e-commerce activity with an unsatisfactory level of risk.
2005-08
No change from previous year.
Strategic Goal #3
Create a regulatory environment that will facilitate credit union innovation to meet member financial service expectations.
Outcome Goals
3.1: Ensure NCUA Regulations are current, clearly written, flexible, necessary, and relevant for an effective regulatory environment.
3.2: Support credit union efforts to provide innovative and competitive financial services in a changing economic environment.
3.3: Encourage credit unions to meet the economically and sociologically changing financial needs of credit union members.
General Strategies:
- Conduct reviews of examination and supervision procedures taking into consideration economic conditions.
- Conduct reviews of NCUA regulations for needed changes to ensure they are current, necessary, and effective.
- Promote regulatory and legislative efforts designed to reduce barriers and impediments to credit unions being able to meet changing member expectations.
- Enhance NCUA’s abilities to share information and legislative efforts with credit unions, leagues, State Supervisory Authorities and associations.
Annual Performance Goal 3.1
Note: Only changes to the base year 2003 are annotated in years 2004-2008
2003
3.1: Review one third of NCUA regulations annually for needed changes.
2004-08
No change from base year.
Annual Performance Goal 3.2
2003
3.2: Review examination and supervision procedures to ensure they are flexible and facilitative in a competitive environment; yet maintain
safety and soundness.
2004-08
No change from base year.
Annual Performance Goal 3.3
2003
3.3: Enhance credit union financial services by reducing regulatory barriers and sharing information and legislative efforts with credit
unions, leagues and associations.
2004-08
No change from base year.
Strategic Goal #4
Enable credit unions to leverage their unique place in the American financial system to extend availability of service to all who seek such
service, while encouraging and recognizing their historical emphasis on serving those of modest means.
Outcome Goal
4.1: Facilitate credit union efforts to increase credit union membership and accessibility, continue to serve the underserved, and enhance
financial services.
General Strategies:
- Promote and enhance federal credit unions’ ability to expand financial service availability to all through the Access Across America program.
- Encourage and facilitate federally chartered credit unions to focus on providing competitive services based on sound business practices, to partner with others to increase efficiencies and to overcome the digital divide.
- Encourage and facilitate federal credit unions to develop business plans that identify prospective new members and to monitor trends in their fields of membership, in order to facilitate the continued future viability of the credit union.
- Provide federal credit unions with an efficient process to expand fields of membership through effective statutes (including Federal legislation), regulations, policies and procedures.
- Identify challenges in forming new federal charters and expanding existing charters, and identify and share resources to mitigate those challenges, partnering with trade associations and others to enhance service to underserved groups.
- Review statutes and regulations with a focus on such areas as field of membership, Credit Union Service Organizations, voluntary mergers, and incidental powers.
- Explore technological means for effective two-way communication between the credit union community, SSAs, and NCUA.
- Facilitate resource identification for federal credit unions to obtain economies of scale.
- Facilitate resource identification for federal credit unions to attract and retain new members, especially those in underserved areas.
Annual Performance Goal 4.1
Note: Only changes to the base year 2003 are annotated in years 2004-2008
2003
4.1a: Expand financial service availability to all through the Access Across America program.
4.1b: Implement a process to identify emerging trends in demographics and financial service offerings and share information with examiners, SSAs, and federal credit unions.
4.1c: Implement a review process of the successes and difficulties encountered by new charters and identify common themes or reasons for success or failure.
2004
4.1b: (Modified) Maintain a process to identify emerging trends in demographics and financial service offerings and share information with
examiners, SSAs, and federal credit unions.
4.1c: (Modified) Maintain a review process of the successes and difficulties encountered by new charters and identify common themes or reasons for success or failure.
4.1d: (Added) Establish a triennial review process to address issues to facilitate mergers over liquidations, as appropriate.
2005-08
No change from previous year.
Strategic Goal #5
Enhance NCUA’s organization to continue to work with the credit union community in creating an environment that enables credit unions to
continue to flourish while addressing the challenges of the twenty-first century.
Outcome Goals
5.1: Ensure NCUA has the ability to identify management and human capital issues and trends and implements timely solutions before the
issues become critical.
General Strategies:
- Ensure Human Capital support systems provide necessary tools to meet current and evolving requirements of risk-focused transition and the Office of Personnel Management.
- Ensure NCUA has an effective means to continuously evaluate needs, plan for and execute required training for current and future personnel in all program and support areas.
- Ensure NCUA has an effective means to continuously evaluate emerging technologies as potential tools to enhance operational effectiveness and efficiency where appropriate.
- Ensure NCUA has an effective means to provide safe and secure operations of its network and systems.
Annual Performance Goal 5.1
Note: Only changes to the base year 2003 are annotated in years 2004-2008
2003
5.1a: Ensure managers have access to human capital data to make optimal human resource decisions concerning workforce planning,
organization, training and development.
5.1B: Ensure Ncua Workforce Is Appropriately Trained And Transitioned In A Timely Manner To Meet Requisite Competencies And Skills To Fully Support The Risk-Focused Examination And Supervision Programs.
2004
5.1b: (Changed) Ensure NCUA workforce is appropriately trained to meet requisite competencies and skills to fully support the risk-focused
examination and supervision programs.
2005-08
No change from previous year.
Annual Performance Goal 5.2
2003
5.2: Leverage existing and emerging technologies to enhance NCUA’s computing capabilities.
2004
5.2: Ensure secure, efficient access of agency information technology capabilities to all authorized users.
2005-08
No change from previous year.
2006
5.2: (Changed) Leverage existing and emerging technologies to enhance NCUA’s computing capabilities.
2007
5.2: (Changed) Ensure secure, efficient access of agency information technology capabilities to all authorized users.
2008
No change from previous year.
Annual Performance Goal 5.3
2003
5.3: Implement the Accountability in Management process to assess the current environment and organizational structure to facilitate
enhanced NCUA effectiveness and efficiency.
2004
5.3: (Modified) Annually re-assess the current environment and organizational structure for potential enhancements to NCUA’s effectiveness
and efficiency.
2005-08
No change from base year.
Questions to Consider
- Do you believe the scope of NCUA’s mission statement is appropriate (reflects its appropriate mission of ensuring credit union
safety and soundness without needless intervention in credit unions' decisions and activities)?
Yes ______ No ______
If not, what modifications do you think should be made?
- Do you believe the vision statement is appropriate?
Yes ______ No ______
If not, how should the vision statement be modified?
- Does the Strategic Plan sufficiently incorporate agency objectives regarding the use of Prompt Corrective Action (PCA) and other
agency programs?
Yes ______ No ______
If not, what changes would you recommend in this regard?
- Do you disagree with any of the 5 goals set forth in the Strategic Plan?
Yes ______ No ______
If so, which goals do you disagree with and why?
- Are there any additional goals which you believe should be included in the Strategic Plan?
Yes ______ No ______
If so, what are those additional goals?
- Other comments?
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Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com |
