NCUA plans major restructuring, including closing two regional offices

NCUA chairman: “The time has come for the NCUA business model to change”

Fresh off asking the Consumer Financial Protection Bureau to give it supervisory authority over the nation’s largest credit unions, the National Credit Union Administration announced a major restructuring plan that will see the agency close two of its five regional offices and eliminate some agency offices with “overlapping” functions.

The NCUA announced its plans on Friday, touting “greater efficiency, responsiveness, and cost-effectiveness” as goals of the plan.

“The time has come for the NCUA business model to change,” NCUA Board Chairman Mark McWatters said.

“Positioning the NCUA to meet the changing demands of the credit union system we regulate in a transparent and fully accountable manner while promoting efficiency and effectiveness is essential,” McWatters said. “Re-evaluating our operations is integral to fulfilling our statutory responsibilities to protect the deposits of the nearly 108 million credit union members while maintaining the safety and soundness of the Share Insurance Fund and the viability of the credit union system.”

According to the NCUA, the changes come as the result of an internal review that began late last year.

Under the NCUA plan, the agency’s five regional offices will be consolidated into three by closing the Albany, New York, and Atlanta, Georgia, offices.

That would leave the “Capital” regional office, which is located in Alexandria, Virginia, and oversees Delaware, District of Columbia, Maryland, New Jersey, Ohio, Pennsylvania, Virginia, and West Virginia; the Austin, Texas, regional office, which oversees Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, and Wyoming; and the Tempe, Arizona, regional office, which oversees Alaska, Arizona, California, Guam, Hawaii, Idaho, Nevada, Oregon, Utah, and Washington.

Presumably, oversight of credit unions in Connecticut, Maine, Massachusetts, Michigan, New Hampshire, New York, Rhode Island, and Wisconsin (previously covered by the Albany office); and Alabama, Arkansas, Florida, Georgia, Indiana, Kentucky, Louisiana, Mississippi, North Carolina, Puerto Rico, South Carolina, Tennessee, and the Virgin Islands (previously overseen by the Atlanta office) would be folded into the remaining offices.

The NCUA restructuring plan also calls for the elimination of “four of the agency’s five leased facilities,” although the published plan does not provide more specifics on what facilities those are.

Additionally, the plan calls for the creation of an “Office of Credit Union Resources and Expansion,” which will be formed by “redefining and realigning chartering and field-of-membership, credit union development, grants and loans, and minority depository institutions programs.”

The plan also calls for the NCUA’s Office of Examination and Insurance to be restructured into “specialized working groups,” while the Asset Management and Assistance Center will be realigned to include “changes to the servicing business model and moving to a financial supervisory structure.”

NCUA said that it also plans to eliminate agency offices with “overlapping functions and improve functions such as examination reporting, records management, and procurement.”

The NCUA said that the proposed plan anticipates a “reduction in the agency’s workforce by attrition.”

“Months of very hard work by agency staff have produced a solid, commonsense plan that will help the agency respond to a new economic environment without sacrificing its ability to ensure the safety and soundness of our credit union system,” NCUA Board Member Rick Metsger said. “The restructuring effort will come together over a period of years, and credit unions will reap tangible benefits from our work.”

The announcement of the proposed changes comes just a few weeks after McWatters, who took over as chairman of the NCUA board last month, asked the CFPB to make the NCUA the primary agency responsible for the examination and enforcement of consumer financial protection laws for credit unions with assets of more than $10 billion.

Under the current system, the CFPB oversees credit unions with assets of more than $10 billion.

According to the NCUA, there are only a few credit unions that have assets of more than $10 billion: Navy Federal Credit Union, State Employees’ Credit Union, Pentagon Federal Credit Union, Boeing Employees Credit Union, Schools​First Federal Credit Union, and The Golden 1 Credit Union.

The NCUA said that more details on its plan, including projected cost savings, will be made available at its upcoming fall budget briefing.

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