At the Credit Union Enterprise Risk Management conference earlier this month, a senior official at the NCUA declared that the agency is taking a more qualitative approach rather than quantitative in its examinations. Tim Segerson, deputy director of the Office of Examination and Insurance, acknowledged that credit unions that don't take a certain level of risk damage their income, making them a potential risk to the insurance fund. He explained that the NCUA's exam guide even instructs examiners to take a step back and look at the bigger picture.

Unfortunately, that's not what we're seeing and hearing from credit unions on the ground. Turning a ship as big as the NCUA is a tall task, and it's not going to happen overnight. I know with our small staff at Credit Union Times, it is a feat to accomplish  the smallest things sometimes, and, of course, you've experienced this in your organizations as well. People and organizations get set in their ways. But if the NCUA's upper management is consistent in its steering and enforcement it will get there.

Support will have to come from on high as well. Board support is helpful, but each director is only there for six years at a time maximum. The new executive director of examinations will be holding the rudder in this process. The person the board picks to lead the agency's career employees will have to have the diplomacy to work with the revolving door at the board level, the courage to enforce this way of thinking within the agency and a deep understanding of the credit union community. Given that many of the 25- and 30-year veterans of the agency are gone, this person likely will have a very different management style as well that will assist in this new direction. In the end it will be to the benefit of the NCUA and credit unions to accomplish this.