One of the vital initiatives  Ed Callahan took as Chairman of NCUA was to take the monthly public board meetings “on the road.”  Over a period of two and half years, public  board meetings wewre held in all six regions. Often in locations that coincided with already planned league or national conferences.

For example the July 1982 board meeting was held in Chicago  at the same time as NAFCU’s annual meeting. That was the same weekend that the Penn Square bank failure occurred.  Because of credit union investments with uninsured Penn Square Bank CD’s, the Board meetingt attracted widespread interest.

Constituents Meeting Their Regulators

The purpose of these outside the beltway public events was to give credit unions a chance to attend meetings and see the board at work. In addition the visits often involved credit union conversations, local newspaper interviews, all which raised the profile of the credit union system and  the movements embrace of deregulation. The visit from DC raised the profile of an areas  credit unions and their contributions to their  their communities.

These interactions created awareness of NCUA’s activity and leadership.  It gave senior DC based staff direct conversations with credit union leaders on their home turf and in the various economic circumstances around the country.

Each board meeting was followed by an open press conference where Chairman Callahan and staff would answ questins from the media and credit union attendees.

Today’s Public Meetings

Yesterday’s NCUA board meeting was broadcast live, an effort going back years and accelerated by COVID’s cancellation of inperson events.  It is a practical way for many to watch a distant public meeting live or later by video.  While interaction is not sought, the slides and other presentation data can be downloaded by viewers.

Decades later this board live broadcast have replaced the on-the-road visibility which was discontinued after Chairman Callahan’s tenure ended in 1985.

But does it make a difference whether Board meetings are viewed via digital broadcast or in person in a physical serrting?

Why In-Person Matters

Tim Calkins is a marketing professor at Northwestern University’s Kellog Management School.  He uses remote learning sessions in both his class room lectures and private consulting assignments.

The Covid epidemic nade virtual delivery a necessity.  The use of remote, live virtual meetings has continued as an accepted option for many organizational inernal management meetings as well as public events such as member annual meetings.  Sessions can be  interactive and seemingly similar in content to in-person events with the same purpose.

Moreover, virtual  events can be a more effective use of time by both presenter(s) and participants.  No travel, recordings can be made at once, and AI edit summaries produced.  The reach can be  unlimited by audience size, location, or time zone.  What’s not to like?

Following is Tim Calkins’ assessment of why in-person still brings benefits that virtual sessions cannot duplicate from an article he posted last week:

The Project
Over the past quarter, I’ve had the chance to work with a leading company on a competitive situation. There were new entrants in their industry and the company was formulating a response. This was partly a strategy question and partly a political question: getting the team and the senior people on board.

I did the project remotely. I taught a class session for the team on Zoom, had multiple phone calls and then participated in two team planning sessions in a hybrid format.

The Problem
The project is winding down, and I’m not feeling great about it. I think I made a positive contribution, but not as much as I could have, for a very simple reason: I wasn’t there.

This wasn’t a problem for the class session; I can teach effectively on Zoom. It was definitely a limitation in the work session.

There were lots of problems with being remote. The first issue was that I couldn’t hear much of the conversation; I was picking up about 60% of the discussion. I could follow along but I missed some of the context. Then, it wasn’t easy for me to jump in; I didn’t know how I was showing up in the room, so I found it awkward to make a comment. I also couldn’t read the room. I couldn’t see how my comments were being received. Were people nodding and agreeing? Or rolling their eyes?

Perhaps most important, I wasn’t there for the open times: before the meeting, during the breaks, after the meeting. These liminal times are critical when it comes to influencing and building relationships. During a break one can follow-up on a comment, ask a question to clarify a point or just build a relationship.

In hindsight, I should have insisted that to take on the project, I had to travel to the company for the key meetings.

I didn’t do this because my schedule has been hectic, so travel would not have been easy. And the company didn’t request it; they routinely did hybrid and remote meetings.

The Learning
My takeaway is simple: don’t do a strategic project if you can’t be physically present.

I don’t need to take on company projects; I only accept a new program when I think I can add value and will learn something.

Going forward, I’ll pick and choose with a bit more care. I’ll still teach remotely, but I’ll only do strategy working meetings when I can be in the room.

The Opportunity for NCUA or Any Board with Public Accountablity

Might a new NCUA Chairman revisit the idea of taking Board meetings on the road?  Such events could accelerate relationships, learning about local credit union circumstances and most importantly, building trust that can only be created person to person.

If Senate hearings proceed as planned and Trump’s nominee for the next NCUA chair is approved, todays board meeting will be Hauptman’s final time as NCUA’s solo leader.

As he departs,  NCUA situation is like a suitcase without a handle, or wheels.  The agency is being led by a single person, not the prescribed board.  Its operataing capacity has been reduced by a DOGE induced, staff designed elimination of 20% of its workforce.

Flooding the Zone

Hauptman’s major initiative has been to “flood the zone” with over a dozen regulatory revews  addressing such urgent issues as banks purchase of credit unions versus the operational realities of credit unions purchase of banks.

The agency continues to publish  a repeating loop of bureaucratic processes such as banning people from further activity in credit unions or periodic issuance of credit union data.  When the nexr administrator opens the suitcase, he is likely to find little addressing critical cooperative  or administrative management issues, e.g. the effectiveness of agency examinations.  One indicator is the growing list of summary liquidations from sudden discoveries of significant, long term large operating deficits.

Hauptman has held board meetings “only as necessary.”   His solo tenure of almost 15 months is an example of the shortcomings of a single administrator  without either credit union context or regulatory experience.  However that resume gap is not unique to him.

The Knowledge GAAP

Such appointments, especially as Chair,  mean the learning curve for new leadership is extended and  there is total dependence on the bureaucracy’s agenda.  More critically, there is a lack of relationships and knowledge of the credit union system and its different leadership elements.   It narrows the understanding of issues from both an historical perspective as well as key differences about current system priorities.

The result is that the cooperative system’s uniqueness and capacity are underestimated.   Critical issues are viewed from the more familiar perspective of the banking system.  And the siren call of some lobbyists for the false standard of “parity” becomes a basis for decisions.

A Vacuum in Dual Regulatory Oversight

There has been a vacuum in regulatory leadership at both the state and federal levels for some time.  It is hard to think of a comment or action taken in either system that addresses important trends and issues in a considered manner. The issues silently observed include purchases of banks, the merger frenzy driven by CEO payouts, the absence of real member governance rights, and zero transparency in credit union strategy and cooperative accountability to owners.

Leading NCUA is not a one-person job,  It requires  both administrative oversight plus  constant  dialogue and initiatives with credit unions, collectively and individually.

An Empty Suitcase

Right now NCUA’s suitcase is pretty light.  It may be easy to lift without a handle.  But sooner or later the movement will experience the consequences of a regulatory system that  has no cooperative agenda or engaged oversight.

As the regulatory grasp and  staff effectiveness erode, this will  create a series of reactive responses to ideological/political priorities or to inevitable external problems or crisis.  The system will be at the mercy of events without informed and committed regulatory leadership.