Rekindling A 30-Year-Old Vision

Discussions held during the largest ever credit union conference still resonate today.

Thirty years ago this week, in December 1984, NCUA conceived and held the largest ever credit union conference. The unprecedented gathering in Las Vegas included every federal regulator and examiner, most state regulators and field staff, volunteers and managers from 800 credit unions, and trade association officials. More than 2,500 participants attended the conference to share expertise and experience. NCUA had to limit credit unions to two registrants only, and even then, the conference reached its capacity two months before it began.

Who Was There?

Can you name the attendees of the 1984 National Examiners Conference? Check out the photo game at the end of this article

Why So Popular?

The meeting’s goal was to explore the challenges of operating in a totally new environment. The economy had pulled out of a recession with double-digit inflation and unemployment and now had an expanding GDP.

Recovery was occurring in the midst of a megatrend transformation from an industrial to an information society. Detroit, the Midwest, and the rest of the Rust Belt represented yesterday’s business leaders. The country’s economic momentum and entrepreneurs were moving to the Southeastern and Western Sun Belt states.

Simultaneously, the financial system and other key sectors, such as airlines, were deregulating. Credit unions, banks, and savings and loans had been chartered as local quasi monopolies with government regulators setting precise limits on most rates and products. That day was over now success would depend on the ability to compete in the open market.

Industry experts led panels, workshops, and case studies. The meeting’s gigantic educational effort resulted in more than 60 sessions with more than 300 speakers. All conference goers attended general sessions with speakers that included representatives from the Fed, the FHLB, and then-vice president George H.W. Bush.

Questions such as the ones outlined here were intended to stimulate debate:

  • Is the regulator obsolete? Will credit unions be taxed?
  • Common Bond Associations: Where should we go?
  • How can personal computers improve management decisions?
  • How do credit unions evaluate the performance of the share insurance fund?

The purpose of this unprecedented gathering that brought together all segments of the credit union system was to, in Chairman Ed Callahan’s words, discuss current concerns and share problem-solving techniques. Examiners need to be exposed to a wide range of ideas that will enable them to a better job particularly in a deregulated environment.

Preceding Events Form Common Efforts

In the 18 months prior to the conference, the credit union system and NCUA had undergone dramatic change during deregulation, including:

  • Adjustments to field of membership policies to respond to changes in the new economy.
  • Access to the Central Liquidity Facility for all credit unions through a partnership with the corporate system and a government lender sensitive to their needs in the event of a liquidity crisis.
  • Deregulation of all share and loan activity to the extent permitted by the Federal Credit Union Act.
  • Enhanced supervision using 5200 Call Report data, annual exams, and toll-free hot lines for credit unions to stay current on events.
  • Cost reduction in NCUA’s federal operating fee schedule of 64% over three years.
  • Restructuring of the NCUSIF along cooperative principles to become the strongest of all federally managed insurance funds.

The public press noted these changes, and credit unions had become America’s favorite financial institution, according to a consumer survey. In 1984 alone, shares grew 16.1%, loans grew 26.9%, and reserves grew 22.2%. In the first three years of deregulation, 1982-1984, total shares grew 54%, increasing total system assets to almost $100 billion.

The Industry Needs A Vision For The Future Now More Than Ever

Callahan’s closing comment presented a vision for the cooperative system.

We are the future, the chairman stated. Seventy five years of success should tell you what the future is it’s been people in the beginning, people now, and it will be people in our future.

That conference 30 years ago offered a glimpse of how special the future could be; yet, today, the industry still has not fully realized this vision of a cooperative system with all segments working in common cause for the member-owners.

A CUSO’s Efforts In Reigniting The Vision

One CUSO is trying to start a movement that could reignite this cooperative purpose from 30 years ago. CU*Answers has developed capabilities that enables credit unions to share data, quickly make data available, clearly measure comparisons, and enhance transparency for member-owners.

These are significant innovations in the examination process, but their purpose extend beyond making exams more timely and cost effective. CU*Answers believes that having the best, most innovative exam processes can be a key competitive advantage for the cooperative system.

That’s why a conference held 30 years ago still provides insight today. Back then, regulators and credit unions were in common purpose; they were not engaged in endless rule-making exercises or debates over future speculation that constrain opportunity.

The largest conference ever that brought together all of the stakeholders in the cooperative system did not happen overnight. It was the result of a series of confidence-building steps, system innovations, and open dialogue. All combined, these efforts built confidence that such an event would be meaningful and productive. It still stands as a beacon of hope for what can be, even in a system that has grown more than 10 ten times larger.

We are all about people, Callahan said.

That simple message is needed now in today’s financial system more than ever.

Who Was There?

Can you name the attendees of the 1984 National Examiners Conference? Click here for answers.







December 19, 2014

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