OSCUI Resources, Exam Modernization & Succession Planning

Transcription

1 NCUA s Office of Small Credit Union Initiatives (OSCUI) Lauren Bethea, Economic Development Specialist OSCUI Resources, Exam Modernization & Succession Planning

2 OSCUI Resources 2

3 Consulting Competitive Enrollment Non-competitive Enrollment Budgeting Guidance Marketing Strategy Guidance Urgent Need Consumer Compliance Merger Guidance New charter FOM Expansions/Capturing New Markets Internal Control Guidance Strategic Planning Guidance New Product Services/Development Recordkeeping Guidance Secondary Capital Guidance Net Worth Restoration Plan OSCUI Resources 3

4 Consulting Enrollment Nomination cut offs are May 31 (for consulting in the third and fourth quarters of each year) and November 30 (for consulting in the first two quarters). OSCUI Resources 4

5 Are you a Low Income Designated Credit Union? Low-Income Designated Credit Unions Per Year DCAMAIL@ncua.gov OSCUI Resources 5

6 Low-Income Designation NCUA s Designation A federal credit union qualifies for LID when a majority of its membership (50% + one member) qualifies as Low-Income Low income members are those who earn 80 percent or less than the median family income for the metropolitan area where they live or the national metropolitan area, whichever is greater. State chartered credit unions must work through their SSA OSCUI Resources 6

7 BENEFITS OF LID 1. Non Member Deposits 2. Office of Small CU Initiatives a) Loans b) Grants c) Consulting Services 3. Secondary Capital Accounts OSCUI Resources 7

8 Grants and Loans OSCUI Resources 8

9 2014 Videos Interactive Fraud Video With CUNA Mutual Set of 6 Modules Board of Directors Series Financial Literacy-certificates Multiple Modules People Helping People in Action CDFI What is CDFI and Its Impact on Members Succession Planning OSCUI Resources 1

10 2014 Webinars Date 16-Apr 21-May 18-Jun Proposed Title Small Dollar Lending Grants Budget - Tools to Fit Your Needs 9-Jul Mobile Apps 20-Aug Disaster Recovery 17-Sep Mergers Best Practices 15-Oct Product Pricing 19-Nov Building a Loan Portfolio 17-Dec Internal Controls All training is FREE. OSCUI Resources 2

11 OSCUI Resources 3

12 FOCUS Sign Up OSCUI Resources 4

13 Examination Modernization Examination Report Modernization 1

14 NCUA Letter 13-CU-09 Examination Report Modernization 2

15 Key Changes Document of Resolution (DOR) Root Problem Corrective Action; 120 Day Follow Up Examiner s Findings and DOR Stand Alone Examination Overview High Level Summary (CAMEL & Risk Ratings) Update Documents (2) DOR Status Report Status Update- LUAs, PWLs, etc. Examination Report Modernization 3

16 Benefits of Change Improves Consistency Eliminates Redundancy Creates Prioritization Requires Management Input Examination Report Modernization 4

17 Where Can I Find the Changes? NCUA Letter 13-CU-09 NSPM Chapters 11 & 13 (National Supv Policy Manual) Effective January 1, 2014 Hyperlink: gov/resources/pages/lcu aspx Examination Report Modernization 5

18 Who Provided Input for the Changes? Credit Union Industry Officials NASCUS (National Association of State Credit Union Supervisors) NCUA s Office of Inspector General Examination Report Modernization 6

19 Examination Documents Examination Overview Document of Resolution (DOR) DOR Status Report Examiner Findings Examination Report Modernization 7

20 Exam Documents (Con t) Supplementary Facts Status Update Template Loan Exceptions Examination Report Modernization 8

21 Exam Documents Examination Overview Examination Report Modernization 9

22 Updated Overview CAMEL Risk Rating High Level Discussion Of Credit Union s Risk Profile Financial Trends Progress in Correcting Prior Concerns Examination Report Modernization 10

23 Exam Documents Document of Resolution Examination Report Modernization 11

24 DOR Definition Unsafe and/or unsound practices threatening the CU s stability Examination Report Modernization 12

25 Root Problem - Example Charge-off the following loans: Doe, John Account #123, balance $ Borrower, Bob Account #456, balance $5, What is the root cause? Inadequate policy? Failure to comply with policy? Weak Collections Other? Examination Report Modernization 13

26 Developing DOR-Step 1 Discuss the problem with management Reach an agreement or understanding of the problem Examination Report Modernization 14

27 Developing DOR-Step 2 Work together and develop the corrective action plan If management is unable to develop a reasonable plan, the examiner will DOR could be for management to develop a plan Examination Report Modernization 15

28 Exam Documents Examiner Findings Examination Report Modernization 16

29 Changes to Examiner s Findings Less Urgent Problems Correctable in Normal Course of Business Correction Timeframes Must be Reasonable Examination Report Modernization 17

30 References Examination Report Modernization 18

31 References Examination Report Modernization 19

32 References NCUA Letter 13 FCU 09 NSPM Chapter 11, Section 3 NSPM Chapters 13 Examination Report Modernization 20

33 Succession Planning 1

34 What is Succession Planning? A deliberate and systematic effort to ensure leadership continuity, retain and develop intellectual and knowledge capital, and encourage individual advancement. 2

35 Succession Planning Key People Drive the CU s Success. What happens when they disappear? Succession Planning 3

36 Succession Planning Considerations Has your board formally defined the CEO requirements? Is your credit union actively grooming a successor? How much time is invested in succession planning? Have you asked internal candidates about the CEO position? Do you have an internal candidate who could step into the CEO s role? 4

37 Percent of CUs with CEO Succession Plans Source: CUNA Complete Staff Salary Survey 65.00% By CU Asset Size 64.00% 63.00% 62.00% 61.00% 60.00% 59.00% < $5 Million $5 to $20 Million $20 to $100 Million $100 Million + 5

38 Estimated Number of CEO Retiring in Two Years Source: CUNA Complete Staff Salary Survey Some to leave but not retire.. By CU Asset Size < $5 Million $5 to $20 Million $20 to $100 Million $100 Million + 6

39 Why Do It? Employees say leadership is a key contributor to job satisfaction and commitment Approximately 60% of credit unions have a written succession plan Credit unions spend an average of two hours per year on succession planning Have you lost highly talented people? Has your credit union incurred opportunity costs due to the time necessary to replace a key person? 7

40 Why Do It? Untrained People Could be Thrown Into Critical Roles Succession Planning 8

41 Succession Planning Recruit or develop employees to fill key roles at your credit union Ensures operational efficiency when key individuals depart Used to fill key managerial positions 9

42 Important, but not urgent Challenges Change 10

43 Developing A Succession Plan 11

44 2 - Types of Succession Plans Emergency CEO Succession Plan Long-Term Succession Planning Process 12

45 Emergency CEO Succession Plan Critical Sudden or unexpected absence of the CEO Ensures leadership continuity, member service and organizational confidence 13

46 Long-Term Succession Planning Process Requires Active Involvement of: The Board CEO Human Resources Focus is on Development vs. Replacement Anticipates Future Needs Anticipates Aspirations of Employees To keep Talented People: Meaningful Challenges Growth Opportunities CEO Transition 14

47 What are the steps Identify Key/Critical Positions Monitor, Evaluate, Revise Succession Planning Process Conduct Position Analysis Develop Succession Plan 15

48 What are the Steps 1. Identify Key/Critical Positions 2. Conduct Position Analysis 3. Develop Succession Plan 1. Identify strengths and gaps 2. Develop individualized development plans 3. Engage candidates in the leadership development process 4. Provide the board with updates and feedback 4. Monitor, Evaluate, Revise 16

49 Conduct Position Analysis Internal and External Factors What competencies or skill sets will be required? What are the gaps? What strategies will be used to address the gaps? 17

50 Develop Succession Plan Strategies to overcome the gaps are outlined to include target completion dates, responsible parties, and required resources. 18

51 Monitor, Evaluate, Revise Select evaluation period (typically reviewed annually) Be prepared to respond rapidly to changes in the plan Status updates should be monitored via a succession planning template 19

52 Succession Planning Is Not A one time event An individual decision Solely a individual career advancement opportunity A reaction to an open position Managers relying on their own comfort or knowledge with potential candidates 20

53 Keys to Success Identify Budget and Resources Required Start Today Employee Involvement Link Plan to Other Planning Processes 21

54 Succession Planning My father gave me the best advice ever A fool with a plan can outsmart a genius with no plan any day. T. Boone Pickens Succession Planning 22

55 Succession Planning So What s Your Plan? Succession Planning 23

56 Template 24

57 Contact OSCUI with questions or comments. Website: Phone: Mail: 1775 Duke Street Alexandria, VA Workshops 25