Credit Union Exam Solutions Presents With Flying Colors

MARK T: Hey everyone, this
is Mark Treichel with another

episode of With Flying Colors.

This is a super short take.

As I mentioned in a recent podcast, I'm
going to be doing some short topics here

between now and the end of the year.

NCUA's recent budget, which I've
talked about previously, I want to

highlight one particular document
that I saw on LinkedIn, actually.

NCUA, someone that I'm
friends with on LinkedIn.

Or connected with on LinkedIn posted a
job vacancy that caught my eye because

it related to the budget now in the
budget they are adding specialists and

they state that they are adding new
regional specialist examiners dedicated

to areas of emerging complexity and
risk within the credit union system.

Such as electronic payment
systems, consumer compliance,

and bank secrecy act compliance.

I've talked about that
a little bit previously.

But they also go on here.

They also go on here to state
that the proposed 2024 budget

supports the second phase.

Of an effort to increase the amount
of specialists by adding 27 new

regional examination staff, including
specialists and supervisory positions.

The specialist positions are
offset etc, but the reference

is to supervisory positions.

And that's what I want
to talk about here today.

The position that was announced
is a new position at NCUA.

And it is called a Director
of Specialist Resources.

And the position description, I'm
going to read some of the highlights

of that and then give you my take.

So it states, as a director of specialist
resources primarily supervising regional

information system officers, And
regional electronic payment specialists.

You will evaluate employees performance.

Yep, that's normal.

Make recommendations for recognition.

That's normal.

Effect disciplinary action.

That's normal.

Identify issues critical to an
effective specialist program and

provides timely guidance on such
issues to regional management.

Participate with other regional
staff in considering operational

and administrative matters which may
result in the establishment of NCOA

and regional policies, objectives, long
range plans, changes in program emphasis,

and other issues of major importance.

Negotiate or direct negotiations
with officials of credit unions

and state supervisory authorities.

Develop and implement a risk management
framework and program for specialists.

specific regional specialist areas,
including identifying, monitoring,

and reporting macro regional risk.

Represent the regional director before
internal and external stakeholders on

subjects related to areas of expertise.

Contribute to the formulation of
insue policy by serving as an advisor.

Complete specialist
feedback forms for each.

Supervise specialties in other
specialty areas as needed.

The structure of specialists within NCUA
is the specialists are higher graded.

They have, until this announcement
came out, they've reported to

the director of special actions.

So when you are in an exam, and you have
your normal chain of command, so you have

the examiner in charge who reports to a
supervisory examiner by the way, if you

appeal Informally or formally appealed,
that's the process you would follow.

That chain of command, the examiner in
charge who writes your final report,

issues report, uploads report to NCOA
and meets with you and or your board of

directors depending on your CAMEL code.

The supervisory examiner
who reports to the associate

regional director of program.

Now the current structure is if
specialists participate A, they're

higher graded, which creates some
issues B, they're lower graded.

Who has more clout on the exam,
because even though the EIC is in

charge, the higher graded person
says, hey, you need this in a docket

resolution and then disappears and
goes off to their next contact.

That can create some challenges.

One of the other challenges NCUA
had is these folks were reported

to directors of special actions.

Now directors of special actions
have problem case officers

and they have specialists.

That gives them a pretty heavy workload.

And while Directors of Special Actions
are high performers, I believe NCUA

has finally decided that they will
separate the specialists from the

Directors of Special Actions and house
at least the Regional Information System

Officers and the Regional Electronic
Payment Specialists under this new

Director of Specialist Resources.

Now, if you noted the
last duty I mentioned.

It stated that they could assign
other specialty areas as needed.

Now, I also noted in the announcement
that it was only for two of the regions.

It was for the eastern region
and the southern region.

I believe that when they announce
these positions that they are going

to give flexibility to the regions
on how they want them structured.

For example, maybe the western
region wants One of those disciplines

to continue to be supervised by
the Director of Special Actions.

Maybe the other region wants Capital
Market Specialists to be included

in this supervisory position.

I believe they're going to
allow the Regional Directors to

splice and dice how this works.

One thing I hope that they've resolved,
I know that there was an issue that

occurred when I was there, in that
I wanted my regional capital market

specialist to be assigned credit unions
and EIC cases because when I was a

regional director at the time, there were
some cases that were mostly liquidity

and that economic value related.

So I wanted the EIC to be a
capital market specialist.

The Capital market specialists at the
time wanted the ability to do that out of

their position description And I wouldn't
take it out because I was assigning cases

to capital market specialists I had heard
that there was a recent situation where

They were potentially reevaluating that
it had moved out of the, excuse me, it

had moved out of the position description
so they were no longer able to do that.

And I'm hoping with this new position
that they are able to assign credit

unions as EICs or excuse me, these
specialists as EICs for credit unions.

When they first came up with some of
these positions, I had a gentleman who

works for me now who worked for me at the
time and said, boy, I should take that

position because they get the same pay
as me, but they have no responsibility

because they don't have to make sure
that they've problems are fixed.

And it's a valid point.

You have these higher paying specialists
that, that again, as I say, float in,

float out, say, here's what you need to
deal with, but they're not the ones who

have to have the meet and deal skills.

In the final analysis
to help get things done.

A, this is a positive thing.

B, I saw it out there the announcement
closes actually I think a day

or two before the NCUA board
approves the budget next Thursday.

What does that mean?

That means that the feedback that
they're getting from all three

board members is, Yep, you're going
to get this part of the budget.

So they went ahead, they got
the announcement moving so

they can fill these positions.

That's all good.

Will there be other changes in the budget?

Probably around the edges, but Do not
expect any changes on the budget as it

relates to these specialist positions,
unless they decide to add more because

of what's going on in the cyber security

Microphone (USB Audio CODEC )-1:
Lastly, as NCUA figures out how these

new positions will work, there will
be, you know, this is going to be more

like, , jazz music than classical music.

And just as you're having your exams
going on, be cognizant of the fact that

some of the specialists, are reporting
to a, a third party as opposed to

the first party or the second party.

So if you have problem case officers in
there reporting to a , director of special

actions, electronic payment systems,
reporting to one of these new folks and

your supervisory examiner and your EIC.

So you've got NCUA staff that report to
three different bosses, if you will, that

could have some kinks in the short term.

They'll figure it all out in the end.

I think this is a really good change,
that will help the exam process.

, but 2024 will be a year of transition
as they hire these folks up and as

they get their sea legs, if you will.

MARK T: all right, that's
it for this short take.

Mark Treichel signing off.

With Flying Colors,
appreciate you listening.

I hope you'll listen again soon.

Have a great day.