Former NCUA Chairman Norm D'Amours Talks About His Term In Office, His Relationship With Credit Unions, And His Legacy
Norm D'Amours knows his was a stormy seven-and-a-half years at the helm of NCUA, but he hopes he carved out a legacy that will survive him.
Assistance to small and low-income credit unions, diversifying NCUA's workforce; separating the corporates from control of the state credit union leagues; forcing credit unions to reach out to poor communities through the controversial Community Action Plan-these are the areas D'Amours cites as his proudest accomplishments as chairman of the NCUA board.
"I had to work and scrape for every one of them," said D'Amours in an interview with The Credit Union Journal last week, two weeks following his departure from the NCUA board.
But there was a dubious legacy, too. Of constant bickering and confrontation with his fellow NCUA board members; of warfare with the credit union trade associations; of scandals surrounding the agency's illegal affirmative action program and the biggest takeover and liquidation ever, of Capital Corporate FCU, better known as CapCorp.
To D'Amours those tensions were all part of being the independent arbiter of the credit union movement as its chief regulator. D'Amours is clearly cognizant of the animosity that his stance created with many of the powers-that-be in the credit union movement and acknowledged it wasn't easy being the target of so much ill will. "Everybody wants to be loved," he averred, but said it was important for him to stand up for what he believed was right.
D'Amours, who served in Congress through the S&L crisis in the 1980s, gave notice right from the start that he learned the lesson from the cozy relationship the S&L regulators had with the thrifts they regulated and would maintain a safe distance from the trade associations, even at the cost of alienating some of the credit union movement. His remarks to that affect at CUNA's governmental affairs conference in March 1994, just three months after his appointment, did not sit well with the credit union establishment, some of whom he had served after leaving Congress as a lobbyist for CUNA, then briefly, for NASCUS.
"There really was a battle over not only who would control the agency, but credit unions themselves," said D'Amours. "Credit unions, to a large extent, were acting as their own regulators. When I got there I saw how much control they had over the agency. It was not healthy."
Those early tensions were only exacerbated months later when D'Amours traveled to a meeting of state league executives in Kansas City to tell them of his plans to break their control over the corporate credit unions. To D'Amours, that meeting which culminated in NCUA's prohibition on management interlocks between leagues and corporates, precipitated his tempestuous relationship with the established credit union movement.
'Downhill From There'
"One of the things that I did, and unfortunately it colored the rest of my relationship with CUNA, is break the control of the leagues over the corporates," he said. "It was downhill from there. I couldn't work with them from then on."
D'Amours maintained the conflict was created because CUNA and the leagues were offended by his independence. "The whole idea was 'Who is going to regulate credit unions, CUNA or NCUA?' They never could accept that," asserted D'Amours.
He questioned the regulatory process, which he said often became a referendum to be manipulated by the trade associations on what rules were good or bad for credit unions.
"It's counterproductive for any agency to operate on a notion that turns its actions into popularity contests. Any regulator not willing to be unpopular shouldn't be a regulator," D'Amours stated. "I never worked at it (being unpopular), I just could never back down."
CUNA, claimed D'Amours, has grown to become much more than an advocate for credit unions. "CUNA is becoming the ends, instead of the means. Now they're building a monument on Capitol Hill (Credit Union House). You've got to be careful walking around bragging. There's something fundamentally wrong when the means become an end, and at CUNA, to a large extent, that is what's happening," said D'Amours.
D'Amours said he wants to be remembered within the credit union movement for the work he did to bring attention to the plight of the small credit unions and to the roots of the movement in serving people of small means. While he may not have stopped the trend toward the elimination of small credit unions, the pace has slowed, he claimed.
In the years prior to the D'Amours administration, when credit unions faced similar pressures as banks and S&Ls, hundreds of credit unions big and small were being merged out of convenience.
"The unwritten policy of NCUA when I got there was to merge small credit unions. I changed that when I got there," he said.
From his start at NCUA, D'Amours was a constant student of the credit union movement, regularly quoting Desjardins, Filene and other credit union icons. D'Amours' hometown of Manchester, N.H., is home to the first credit union in America, St. Mary's Bank. He traveled to Canada to visit the Casse Populaires.
He believes the credit union regulator should be more than a safety and soundness monitor, but keeper of the credit union philosophy, too.
"If you get down to the cold numbers, fine, then the free market takes over and credit unions, like banks get bigger and bigger, and fewer and fewer. The social mission gets lost."
Sense Of Relationship Is Important
The common bond concept, which some are pushing to eliminate, is an important part of what credit unions are, D'Amours believes. "That sense of relationship does not exist among bank customers where you have a comity, and also share a sense of belonging to something. I think that bond is important."
Ironically, this chief advocate of common bond and exclusive rights to field of membership (FOM) presided over NCUA during a time when the concepts of common bond and FOM were largely blurred by proliferation of FOM overlaps and community chartering. Yet D'Amours warned that continuing down this path toward open credit union membership and less emphasis on serving people of small means will wipe out the distinctions with banks and some of the privileges that come with those distinctions, not the least of which is the federal tax exemption.
Another irony is that this inexorable move toward open membership is apparently a byproduct of the landmark credit union bill, HR 1151, the CU Membership Access Act, which was born of the bankers' work to limit credit union membership. The AT&T Family FCU case that spawned this monumental credit union law predated D'Amours' Administration, which was faced with the losing proposition of defending the agency's multiple groups policy in court before having the policy reinstated by Congress. NCUA was largely an observer during the massive two-year drive for passage of the bill, driven by CUNA, NAFCU and the other trade groups.
The tax exemption, D'Amours asserted, continues to be an important part of the credit union structure. "Oh, God, I think it's critically important," he said. "I think it's unfortunate that view is not shared by some of the people at CUNA. To repeal the tax exemption would weaken the movement considerably. Credit unions like Navy (FCU) would be forced to manage to the bottom line and would be closing branches on bases and other less profitable operations."
D'Amours, now 62, said he has no current job plans but he would like to stay involved with credit unions. "I would like to stay involved in the credit union movement because I love the movement. It's something I believe in very deeply."
