Credit Union Exam Solutions Presents With Flying Colors

Speaker: Hey everyone, this
is Mark TriCal with another

episode of With Flying Colors.

Today is Tuesday, what?

March 3rd, I believe.

I have to check my GAC calendar here.

It is Tuesday, March 3rd.

Yesterday was day my day one at
GAC as a former regulator, I used

to usually go over there Monday,
Tuesday, and perhaps Wednesday.

And, uh, that's what I'm doing as part
of the podcast attending GAC to see,

uh, what my general takeaways are.

My first GA.

Was as Deputy Executive Director in the
year 2000 and, uh, I missed a few along

the way, but have attended more than 20
Gs and, uh, this one I really enjoyed.

Good to be back in dc Good to be
back, uh, with credit union people.

Good to see former NCA colleagues, those
impacted and not impacted by the buyouts.

Good to see current clients, former
clients, and some potential new clients.

And also good to just see what Scott
Simpson was gonna say as his first.

First GIC as the head of,
uh, America's Credit Union.

So, uh, with that, I, you know,
I, I sat in on three events

I'm gonna highlight here.

Number one was, uh, Scott Simpson.

Number two was Brene Brown and her key,
one of, one of the keynote speakers.

And then of course, the, fireside
chat without a fire, uh, with

Kyle Helpmann and Scott Simpson.

I'm gonna kind of walk through
my takeaways from that.

If you take a listen to this
and, and you saw it and you had a

different takeaway, let me know.

Just to send me a note, I'm
curious what your take on it was.

So, you know, it wasn't a lot of hype.

Uh, it was more about
structure and reality.

I've been to a lot of these.

You know, Scott Simpson
opened the conference.

He.

Didn't the, the, the tone felt different.

And, and in a good way.

He didn't come out celebrating.

He wasn't dancing.

And if you saw last year's opening, uh,
by the former CEO of America's credit

unions, you know what I'm talking about?

He came out and he
talked about stewardship.

He was real.

He called credit unions.

One of the most successful
social movements in American

history, and I agree with that.

It's a big statement.

He grounded it in real stories,
members whose lives changed because

something at the credit, someone
at the credit union showed up.

That part was genuine and he talked
about some family related issues that

were real and that were emotional,
that linked to the credit union story.

And I, I thought that opening,
um, was really, really good.

'cause it kind of.

Let me feel like I knew who
Scott was and how he might

lead to Merrick's Credit Union.

So a big kudos for his, his speech.

But he pivoted into the structure.

Um.

Basically he said, don't forget
credit unions exist because

Congress allows us to exist.

And that's not drama.

It's just the reality.

Tax status isn't permanent field
of membership and the ability to

serve your field of membership is
not permanent as we saw when there

was lawsuits against, uh, how NCUA.

Gave credit unions field
membership long ago and none of

this, none of this is automatic.

Basically getting to the point
that advoc advocacy isn't optional,

and they announced 6,000 people
in attendance, it seemed like, uh,

like it definitely was that number.

It's not like the, the Minnesota
twins who say 10,000 people

showed up, but there's only two.

There really seemed to be 6,000 people,
uh, particularly for his opening speech.

And again, so advocacy isn't optional.

And he touched on unity or at
least my takeaway was Unity.

As an optional leaders, either
small and large institutions

must cooperate together.

And that's probably a reference to the
offshoot association that has been.

Putting some things out on Facebook and
on on LinkedIn where there seems to be

a divide between the large and small.

And in any event, we'll
see how that plays out.

But it was interesting.

At least that was my take on, on some
of the nuances of some of the language.

So, and I'll tell you my time at NCA.

I saw how quickly policy conversations
can shift when you go to D two R, when

you go to R to D, when you just have
new leadership, things can change and

we're living in a chaotic time at NCA.

We're living, living in a chaotic time in
the country, politically and otherwise.

And so it just makes it that much
more important that these 6,000

people show up, that the hike,
the hill is happening and that.

The decision makers understand
the power of credit unions.

So Scott Simpson set the stakes at
that and then, uh, the day shifted a

little bit from structure to leadership.

Under pressure, there
was a lot of discussion.

If you look at the agenda,
there's a lot of different.

Speakers about different
nuances of leadership.

And the one that I was able to sit
in, sit in on was a woman, woman named

Brene Brown, who has a couple podcasts.

Ironically, I followed them.

I'll see if it, uh, while she was
speaking added them to my list.

I'll see if it's something that, that,
uh, based on her conversations, it might

be something occasionally I'll listen to.

But her big theme was
strong ground, solid ground.

Different tone, same kind of tension.

And so her background she's a research
professor at the University of Houston

who has spent over two decades studying
vulnerability, courage, and leadership.

She's written New York Times bestselling
books, hosts two podcasts, has a TED talk

with millions and millions of views, works
with military leaders, CEOs, and major

organizations on culture and leadership.

And my guess is.

They probably brought her in to work
with the merger of Nafq and CUNA and

felt that this would be something
that would be good for her to talk

about at this conference at GAC.

And there's other themes, other
speakers seem to be tied to that.

So, I like the theme.

It's different than what I've seen at GAC
in the past, but I think it's a good one.

I'm curious to see what others think.

So her metaphor, as I mentioned
on Monday, was strong ground.

She told a story about how she
got injured playing pickleball.

She's a former swimmer, former tennis
player, and converted to pickleball.

And that, uh, as you age, you compensate.

By using the wrong muscles.

And that's what she did.

And she had to relearn how to
strengthen her foundation as opposed

to working around the weakness.

And that was really a theme of her
general talk you know, leadership in

uncertain times that, uh, that you are
getting away from your strength, you're

getting away from your foundation.

And she talked about how when leaders.

To feel unstable that
they put their armor on.

She had a big, a big chat about,
um, armor showed a picture, of

a, a knight in shining armor.

But when you have the armor
up, you resist change.

You avoid hard conversations,
and you can, you can.

You convince yourselves that you're
certain about what needs to be done.

But her point was simple.

You need to be vulnerable.

Vulnerability is uncertainty,
risk and exposure.

If you don't take a risk,
you're not being courageous.

And she sold a real cool video about a
little, little girl learning how to ski.

Uh, which is kind of cool.

So, and especially right now, you know,
in the world we're living in we're.

Countries are fighting.

And uh, that's gonna have some
impact on all of us on this globe.

But we've got things moving.

We've got technology, we've
got regulation, we've got

politics the pressure to scale
mergers, all those things.

All those things are, uh.

Motion and the instinct that you have
is to protect what you've already got

when instead you might be needing to
look at how you need to change to grow

and thrive and but going back to, you
know, strengthening the foundation, maybe

strengthening the core is most important.

And when you do that, you
have the ability to lead your

organization long into the future.

But anyway, I, I like, um,
the softer skill type things

like this, and I found it.

She was engaging, she didn't didn't
mind throwing down a, throwing

a cuss word out on occasion.

And, uh, it was effective.

The afternoon item that I wanted to see
was NCA chair Houtman talking about.

Whatever he chose to talk
about in a fireside chat.

Now, in Sue, a board members,
there's only one board member now,

which I talk about a lot here.

He touched on that and sue, a board
members tend to used to, uh, have

individual speeches that they did.

You know, the chair would get the,
the best time slot and the other two

board members will get a time slot.

Several years back they changed
it to a fireside chat, which

makes it, um, the head of, of.

America's credit union sitting
there having a conversation.

It's a little scripted, but this one
was less scripted than most, but I

think it's better than the, the speech
approach, uh, because it leads to more of

a dialogue and Halman tends to dialogue
more than do those speeches anyway.

So it really fits his
wheelhouse for how he speaks.

But I would say thinking about the.

The two other speakers.

And then Helpmann, three things I
took away was, you know, protecting

the cooperative model, protecting
the foundation, uh, and then on,

on helpmann, it was rethinking
how supervision was done, and then

also asking questions or, providing
opportunities as it relates to stable

coins, which he likes to talk about a lot.

In my opinion, a little bit too much.

But in some instances, if that's where.

If that's where the world is going.

Maybe, maybe he's on the visionary
side of this and, and, um, and that's

something that is more important for
credit unions than I might think.

But anyway he provoked a lot
of thought in that regard.

So on, you know, rethinking supervision.

He started talking about customer
service as a regulator, which sounds odd.

First.

Uh, one thing I didn't like is, he
talked about, uh, real jobs and as if

working at NSU A wasn't a real job,
was a real job for me for 34 years.

And, um.

When, when a leader of an
organization says something like

that it's a cheap it, it, I don't
want, cheap isn't the right word.

It might get some applause,
it might get a chuckle.

But for the real NCA staff that are
still working there, who now have

27% less staff and who have to do
more, uh, they feel their job's real.

So I think, um, those kind of, uh.

Those kind of statements kind of detract
it, it might play well in the audience,

and I guess I'll just leave it at that.

But it, as a former, uh, former regulator
I can assure you it's a real job.

It's a different job because, and his
point was, organizations cut all the time.

Well, the, they do and they don't,
credit unions don't cut a lot of staff.

But again, it plays well in a speech.

So, he was talking about consistency
and transparency in exams, setting

clear expectations, setting clear
communications, having fewer surprises,

reducing how many documents they look at.

They talked about, he talked about
their regulatory reorganizations.

Uh, which I've, these are my words I've
kind of frayed as a lot of them are.

Happy to, glad.

And some of 'em have uh, some merit.

But they're tidying some things
up, uh, which are administrative,

which in the long run is a positive.

They did, he did get cheers when
he talked about doing these things.

Not huge cheers, but there was a
cluster of folks that, that clearly

were happy with the things he's done.

So that was cool.

But, in that regard, when NCA, is.

Is going in one direction and then
pivots the other direction and

then pivots another direction.

Reminds me of something I've talked
about on the podcast that sometimes NCOA

can be a b credit union's biggest risk.

'cause if it's a priority today, and it's
not a priority, but to tomorrow, kinda

like, um, overdraft under the halman.

Excuse me, under the Harper
administration, uh, and under the

Biden administration, all fees are bad.

And, um, now under the Trump
administration, that's not so

much the case, but if those things
swing so wildly, it can get hard

to decide what you wanna do.

And, and you have to just kind
of serve your members and decide

what's best for your institution.

But when NCA comes in and bashes you over
it just because of who's in the White

House, that can, that can be challenging.

And I get that, you know, CEOs can handle
tough examinations, tough conversations.

But when purple is yellow one day and
then, you know, six months later, yellow

is purple that can be problematic.

But he talked about agency.

He actually used three different numbers.

And it's funny 'cause I, my number that I
use when I talk about how NCA has shrunk

is 27%, which they said at one junker.

Which was 20 to 22% that took the buyout.

And another 5% who just
left, but he said 20.

He said 21, and he said 27.

At a later point, if I, if my my ears
were working perfectly, but I use the

27%, so I'm gonna stick with that.

So, you know, at least one out
of every four positions is gone.

Uh, you obviously can't
operate under the same way.

I've talked here about how that's chaotic.

For credit unions.

And, um, all that being said, um, the
cheers are because if there's less

of a footprint overall, short term,
your exam should be better, easier,

pick a word et cetera, et cetera.

He used the words, is the
juice worth the squeeze?

Meaning is it something
we really need to do?

You know, you, he talked about,
you know, rules accumulate.

You add something here, you add something
there, and that was, that was a concept.

Um, where we when we came out
with the national supervision

policy, manual regions would
layer things on and rules layer.

So they're trying to go through and
delaer some of the rules, and I, I

give 'em kudos for trying to do that.

But it's mostly in some
instances around the edges.

I did like.

One of the things that, that
I liked was when they moved

guidance from a regulation.

He, he said something I think was
pretty poignant, that if guidance

is part of a regulation, is it more
important guidance than guidance

in a re letter to credit unions?

Because it's in the,
baked into the regulation.

And that was the reality is it
seemed like it was enforced that

way, but they pulled that out.

They also.

Uh, did some things, uh, which America's
Credit Union said they've been encouraging

is, is, um, paying paying some fees
for attending board meetings if you

have to have, get childcare that done.

Uh, that was something, when
that came out, I thought was

kind of cool that NSU A did.

So I believe that's a
proposed rule right now.

But it didn't really feel
political, you know, he, he

avoided the What about Harper?

What about Otsuka?

He said that, you know, we could
have zero board meetings at board

members if I get hit by a truck.

And, uh, that he plans on staying
until his replacement is named.

Uh, I've heard some rumors
about who those, uh.

Who his replacement is going to be.

I won't comment on that until
we see it from the White House.

And when that happens, I'll have a
podcast about whoever the replacement

is for Helpmann at that juncture.

So, uh, what else?

He suggested that well run institutions,
credit unions shouldn't receive.

Sup.

Shouldn't receive supervisory
touches just because time had passed.

So that goes to them lengthening
their exam cycle that goes to

billion dollar credit unions being
eligible for the 18 month exam.

Essentially 18 month exam program.

And I will say, I'll say this a
lot, uh, I was hoping maybe he would

announce that they're getting rid
of not that they would announce what

changes they've made structurally,
you know, it's my understanding they

met with all staff saying ones is
going away or mostly going away.

The consumer protection division and
that the Office of Cure were gaining or

losing things were going to the regions.

You know, and, uh, government's
supposed to be done in the sunshine.

They do too much by notation vote.

I believe rumor has it that they may
have approved these changes by notation

vote, but they're not talking about here.

Or choosing to maybe talk
about it in other forums.

I know.

He's, he had saw, I saw him doing an
interview for for a video program.

And I know he is going to other meetings
and maybe he's handling it there.

I have the opportunity to go to one of
those meetings, uh, tonight and I'll see

if, uh, if anything comes of it there.

But, remember law NSU A and government's
supposed to work in the sunshine,

and there's as much as they're
talking about what's been done.

I think there's some structural things
that that's on the cusp of being approved

or has been approved that they really
need to tell Credit unions about.

Credit unions have the right, and
the act and the law requires law.

The sunshine NSU A does
too much by notation vote.

I think they're.

Pushing the limits of what the
regulation says they can do on that.

But, um, again, I'm not an attorney,
but that is my take on that, you

know, and there, there was a, you
a lot of talk about consolidation

or innuendos about consolidation.

And he had a clever remark about, hey NAFQ
and Q emerged, you know, mergers happen.

Um.

And he got, uh, you know, uh,
Scott said, that's fair enough,

but, you know, industry is mature.

Airlines consolidated, banks
consolidate, telecom consolidates.

It's just the reality that
over time, numbers shrink.

That's the math, but it's not
an individual inevitability.

And that's why credit unions need
to build that strong foundation

individually and collectively.

I guess the nice thing is there's
a lot of talk about the, the.

And some other awards that we're
giving about how people found credit

unions and it was their niche because
it was, it was truly the people

you know, helping people side.

So, and again, so no single
credit union obviously.

Is destined to merge,
but mergers are reality.

And that comes down to your
strategies, your execution and your

leadership, and a lot of leadership
focus tied to the different, uh,

speakers that were in attendance.

But if you treat merger as
a destiny eventually there

won't be credit unions, right?

So it's good to have small,
medium, and large, and hopefully

those all can cooperate again.

That was my interpretation
of, of what I was hearing.

So, a lot of talk about stable coins.

Now the question that comes back to
me, uh, and this, um, I'm, I'm gonna

give a hat tip to Kia Haslet from the
FinTech takes and the Banking Nerd

podcast, both fabulous podcasts that I
listen to every episode of, but you, she

always talks about what is the problem?

What problem does
stablecoin actually solve?

That the current clearance and money
movement rails don't address, right?

Uh, we've got Fedwire, we've got a
CH, we have RTP, and we have Fed Now.

So where's the gap?

What is Stablecoin going to do?

And Helpmann talked about fee
free and how it's fee free.

And if you're in one country and you're
sending money all, there's all these fees.

Somehow, I think the fees will work their
way into stablecoin at some juncture.

Uh, if it gets up and running the,
I think the, I think it's a bit of a

misnomer to say there won't be fees.

Uh, but he talked about how, payments
can be split up quicker if you

use it for participation loans.

And theoretically, I think
there's some things there.

But he framed stable coins as an
infrastructure, cross border efficiency,

uh, easy to program and treasury
backing, reinforcing dollar dominance.

And I guess that, you know, that's
not hype, that's just the plumbing

of keeping the dollar important.

Uh, he made references to,
you know, ask England how.

Felt to not be the dollar dominant.

Uh, to not be the, the not
be the currency of the world.

And once you lose it,
you can't get it back.

And I guess if Stablecoin is
gonna do that, I'm all for it.

I'm not sure, uh, exactly
if that's the case.

I think they're.

From his perspective and from what I've
learned about it on my other podcasts

that I listen to, maybe internationally
there is a value, but domestically,

you know, does it really reduce cost?

Does it really reduce friction?

Does it expand, you know, those
other options that we have?

Uh, or is it just create
an opportunity for fraud?

So, um.

I, I, I'm not sure where I land on it.

I think some of it's hype.

I think some of it might be real.

We're gonna know in five, 10
years as we move through it.

But again, my take on, on stablecoin
versus, uh, and my take on how

Helpmann was framing that up.

So.

You know what, how does it all connect?

Simpson set the stakes that it's
important that you need to be here.

Glad you're here.

Now we need to go hike the
hill, which I think they do

on Wednesday and or Thursday.

The speaker, the podcast, Brene
Brown, talked about strengthening

your foundation, which, you
know, always makes sense.

Always a good reminder.

And she had a good delivery to it.

Uh, I enjoyed that hour and Helpmann
talked freely about, about how

stablecoin could, uh, influence things.

How NCOA was the ahead of the curve
there, how they've gone through

this restructure and, and net net
that's positive for credit unions.

But so different, you know,
different styles, but and.

The same theme kind of in some
ways ran through all of the things.

Getting back to the foundation, is what
you're doing strengthening the foundation

or are you just compensating around it?

Kind of like a deck chair on the Titanic.

Uh, the foundation is really where you
need to focus and, you know, that's

what I walked away from thinking.

It was a fun day.

It was an informative day.

I got to catch up with some, some
colleagues, as I said on the front

end, some current clients, some former
clients, some prospective clients.

To me it's the best event out there to
get connected on, connected with old

friends, connected with what's going on.

And it's exciting as always,
uh, for me to be in DC.

So I am on my way back over for day number
two, uh, day number two for me, Tuesday.

And if anything pops on that.

Where I need an emergency
podcast, I'll do that.

I'll probably do another summary of
this either later this week or tie

it into something early next week.

All right.

That's it, that's my take.

I hope you, if you're at GAC, uh,
if you are a listener and you see me

roaming the halls, come up and say hi.

I'd appreciate that.

I'd love to meet you.

And with that, uh, this is Mark
TriCal signing off with flying colors.