Mary Martha Fortney

When NASCUS’ Executive Committees met in December, it became clear that 2006 would be a busy and eventful year for NASCUS.

As 2005 came to a close, the credit union community was starting to address the issues resulting from the November 3, 2005 House Ways and Means Committee hearing on the credit union tax exemption. Chairman Bill Thomas emphasized the importance of transparency, accountability and verifiability in credit union operations and the need for credit unions to document their service to the underserved.

In planning for 2006, the Executive Committees recognized that NASCUS and the state system will play a role in addressing these challenges. One NASCUS priority for 2006 is enhancing credit union corporate governance practices. In working to strengthen corporate governance, the ideals of transparency, accountability and verifiability can be preserved and strengthened for the benefit of the credit union system.

To pro-actively promote strong governance standards as good public policy, NASCUS formed the Credit Union Corporate Governance Task Force. In 2006, the Task Force will develop governance standards that could become the matrix in the examination process of state-chartered credit unions. Each state could personalize the specifics to meet the needs in their state-chartered credit unions. Best practices will incorporate issues such as board education, diversity, the selection process and director compensation.

Another important priority for NASCUS in 2006 is strengthening state regulatory agencies. NASCUS will grow its Accreditation Program and our education and training opportunities to support strong agency supervision.

NASCUS’ 28 accredited states supervise more than 82 percent of state-chartered credit union assets and the number of accredited agencies is expected to grow. Nine states were re-accredited in 2005 and we are preparing for the re-accreditation of nine other states in 2006. Assuring the quality standard of states’ credit union exam supervision is important to the safety and soundness of the credit union system.

NASCUS’ education and training programs for state examiners will also be integral in strengthening state regulatory agencies this year. NASCUS is planning more than 15 educational offerings in 2006, including schools on member business lending, BSA and emerging risks. NASCUS’ education and training programs provide high level, professional education to examiners, staff of regulatory agencies and state credit union management.

In addition, NASCUS will bolster its efforts to minimize federal preemption and preserve state choice. We continue to be the voice supporting state authority and opposing the federal preemption of rightful authority of state legislatures and state regulators. On legislative and regulatory issues, NASCUS will monitor preemption to ensure that state choice is preserved in order to promote further innovation on the state level. These principles are a part of NASCUS’ mission and everyday activities. In 2006, we remain committed to advocating for the state system.

NASCUS will also work on other projects in 2006. We will continue to educate the credit union community on the importance of access to alternative capital for credit unions and the need for capital reform. NASCUS plans to further strengthen the state and federal regulator partnership and our working relationship with the National Credit Union Administration (NCUA). NASCUS is working with NCUA and state regulators to develop an effective data collection solution to gather information about credit unions’ service to members. As a member of the UBIT Steering Committee, NASCUS will also continue working to remedy issues pertaining to UBIT and state-chartered credit unions.

We thank our boards, committees and management staff for their hard work and continued commitment to the state system. This year will be a challenging and exciting year for NASCUS. Through our cooperative efforts, progress toward these goals is a certainty.

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