Online call report filings may be coming faster than expected

<p>WASHINGTON – NCUA may be ready before the end of the year to propose methods whereby credit unions will file their quarterly call report data online, from a site on the World Wide Web, and whereby such data will be available for public scrutiny in days rather than months. According to David Marquis, Director of NCUA’s Office of Examination and Insurance, the agency has been researching both initiatives for some time and is currently focusing on how to answer security concerns possibly involved in the new procedures. “We are trying to address the security questions involved in letting credit unions file their call reports via a Web site set up especially for that purpose,” Marquis said. “What sorts of passwords and procedures would be needed.” NCUA also needs to study the procedures used to let the public view credit union data from another server and not the main one, Marquis added. He hopes to have both initiatives ready to present formally to the NCUA Board by the end of this year or early in 2003. The push to change the speed at which credit unions and other financial institutions’ information is available to both regulators and the general public has been coming from both the credit union movement and from other federal regulators. CUNA has been urging the agency to facilitate credit unions posting their call report data through a Web site for some time, said Mary Dunn, CUNA’s Associate General Counsel, and following up with that initiative will be the focus of CUNA’s Examination and Insurance Committee which will meet in Washington later this year, she said. Other federal regulators moving in this direction with their own institutions include Donald Powell, the new Chairman of the Federal Deposit Insurance Corporation (FDIC). Speaking in Las Vegas 0to the Community Bankers Conference of the American Bankers Association on March 5, Powell promised the assembled bankers that change to a more time-sensitive approach to data is coming. Powell started out by putting his comments into the context of why regulators and financial institutions both need financial data. “As you well know, we collect bank information in various ways and we use it to calculate the risk to the insurance funds and make sound judgments about the future,” he said. “And – when it is published – you use it to make sound business decisions. Reliable information can make the difference between a good loan and a bad one, or the difference between sound earnings and a struggle to stay alive,” he added. “In many respects the data collection and distribution channels we banking agencies use are outdated and more reflective of the typewriter and rotary-dial telephone era than this new age of high speed connections and real-time information flow,” Powell said. “I am always amazed that I cannot find out – for instance – what deposit flows or bank earnings are doing until about 50-60 days after the end of the quarter. And you hear about it even later than that.” Powell contrasted this slow approach to the speed at which different forms of information are available in contemporary America. “Web sites update stock prices every minute. The folks in the money-market fund industry know weekly how much money is coming into and out of their system. Amazon.com knows the books I’m interested in the minute I log on,” Powell noted. “Given this – and the thousand other ways timely information is being put to use – does it really make sense that the FDIC and the banking industry must wait more than two months to get the answers to basic questions? I don’t think so.” Powell told the bankers that FDIC is moving toward speeding up the system by making call reports easier to file, working to improve data entry and working to let banks see it as it is filed. He also called on the federal government “to establish a central data storage facility among the banking agencies and indicated that the FDIC is working to create an “Internet-based business reporting language. This language will function as a kind of seamless pipeline for business and technical information linking customer, vendor and banking needs across the country and around the world,” he said. Bill Ferguson, president of Financial Information Systems, a firm that, among other services, processes credit union and other financial institution data, “applauded” the movement though he suggested that Powell and other regulators might be ambitious in their goals. “There is no doubt that they could be faster than they are now but I am not sure they will ever make real-time disclosures,” Ferguson said. “Probably what we will wind up with is something shorter than real-time but a lot faster than what we have now.” NAFCU’s chief economist Tun Wai questioned whether additional reporting technology would additionally burden small credit unions, especially those that only this month learned they have to file quarterly. Wai also questioned whether there was as much need for speed when handling credit union data compared to bank data. “Banks are involved in many more activities than credit unions,” Wai noted, adding that he was not sure real time availability of data was as important for credit unions safety and soundness.</p>