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:

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.

1.4b: Complete the program evaluation phase of the risk management model.

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:

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:

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:

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.

5.2: Ensure NCUA provides an integrated, reliable and secure Information Technology architecture that is fully supportive of NCUA strategic goals. 5.3: Ensure NCUA’s organizational structure is responsive to the changing credit union community environment and maintains safety and soundness while supporting credit union growth and development.

General Strategies:

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

  1. 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?
















  2. Do you believe the vision statement is appropriate?

    Yes ______ No ______

    If not, how should the vision statement be modified?
















  3. 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?
















  4. 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?
















  5. Are there any additional goals which you believe should be included in the Strategic Plan?

    Yes ______ No ______

    If so, what are those additional goals?
















  6. Other comments?
















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