WFC Classic: Documents of Resolutions & Project Management

Yeah, it was a great journey we all had.

We dealt with a lot of problems at NCUA.

And Steve, pivoting back to you on that experience you had, you spent 30 some odd years at NCUA.

Now you're doing what we do now, but you had that role as a conservator, CFO, if you will, where you were getting into giving you document resolutions that had a lot of tentacles to it.

And a lot of tentacles mean that you probably need to have some sort of project management wrapped around it.

So what are your thoughts as it relates to document resolutions and resolving them in a way that makes everybody happy.

I'm going to start with kind of a discussion of a trend that we're seeing that was different from when Todd and I were working with our troubled credit unions and that we are seeing extremely lengthy documents of resolution containing upwards of 30 action items and some of them would have parts underneath them.

So they're extremely long.

And because we always had that we would prioritize and say, well, these are the things we really need to do first to make sure we can keep the doors open.

And I know there's more that I'll cover later.

And I thought maybe I'd put the question out for Todd.

And is this is the reason that these doors are containing the everything that they find that needs to be fixed? Is it because of the system that's being used, the merit system or the exam system? Do you think that's contributing to why the long doors?

Possibly, but it shouldn't because prior to MERIT, NCUA had internal tracking for doors, but not findings.

Under MERIT now, they have reporting on both doors and findings.

So MERIT might contribute to a little bit of it.

What I think is probably a bigger contributor to it is lack of experience in problem resolution with examiners.

As you get more experience, you get more discerning about what is the most critical.

And you, over time, come to understand that proteins have finite resources.

So you can only address so many things at once.

And I think just the younger generation of examiners that hasn't went through a recession before, they haven't learned that lesson that recreatives can only do so much.

And I think they just, experience-wise, they don't know how to prioritize which one of these are these really important and which ones are not.

So they treat everything as being important, not understanding that's an impediment to problem resolution, not an aid to it.

My take on it, some of it might be merit, but I think more it's just examiners haven't had to write a lot of doors during periods of stable time periods.

So they have just overreacted.

The other thing we're seeing is in the NSPM, it says in doors, you should use the creditors language for corrective action and negotiate with them about that.