Hey everyone, this is Mark TriCal with another episode of With Flying Colors. Are you going to need a hard hat in your credit union because of the NCA reorganization? Or is NCA staff gonna need a hard hat or should I just take this hard hat off? Well, I'm gonna probably talk through a few of those things. By the way, I got this hard hat when a staff member who shall Rena. May who shall remain nameless gave this to me.
After we got through a particularly rough budget process with the NCA Board, I came into work one day and I had this on my on my chair, and it's one of my prize possessions for my time at NCA as executive Director. All right, so you can take me seriously. I'm going to take this hat off. And we'll set it down over there.
By the way, if you're listening on the podcast, you're saying what hat This is also going onto YouTube, and this is a special edition episode based on what NCUA just communicated. Kyle Halman, Larry fao, and one of Larry's staff members, Amanda Parkhill had discussions about the NCUA buyout program, which was driven by President Trump and initiatives to have a downsize in force, a reduction in force at federal agencies, and they walk through all that.
And I'm going to walk through a highlight version of what it means for credit unions, what it means for NCA. I'm gonna follow that up. A couple additional podcasts, and I'll talk through that here at the end, and you can expect them. To come out in the next couple of Tuesdays. As a reminder most new episodes come out Tuesdays, Thursdays.
We have our Evergreen episodes, which are topics that that live forever that may have a new intro to them because they of things that we're seeing in credit unions with our clients in our conversations, et cetera, et. Et cetera, et cetera. So without further ado let's talk a little bit about what happened at NCUA at the board meeting today. And I'm calling this podcast Trump's Workforce Cuts hit NCUA. What's changing and what's next?
As a result of President Trump Executive Order, 1, 4, 2, 1, 0, federal agencies were being pushed and are being pushed to downsize and streamline. They offered the buyout program, the buyout. Program has closed for 99% of those who accepted it. And they have some near final stats that I'm gonna walk through here. NCA was striving to AEA achieve a 20% headcount.
Headcount cut by the end of the year, and why by the end of the year, 'cause the Trump initiatives were to get to a certain size by the end of the year. It's married to the Trump anticipation, so that would be about 250 people. Out of the 1200 employees that were in the budget for NCUA for the year it's it's been reported here and elsewhere that they've been very successful with the programs that they have. Number two. A point I wanna make is that the, these are not layoffs.
They did not have to go to an official reduction in force. Why is that? Because the voluntary programs were so well received by staff for whatever reason. It could have been because of the money, could have been because of the volume of people that NCA has who is ready to retire or eligible for early retirement.
But in any event, because NCUA is a. Independent agency, LL some, although some would argue that independence is being challenged by the Trump administration because they're independent, they have more powers to pay higher amounts, and they were able to offer $50,000 lump sums for those people who agreed to sign away their career, sign away that they would be retiring early or by the end of the year. It's voluntary. No one was forced out. That's a good thing. That's a good thing for everybody.
The target was met and then some, the they've got several different acronyms for what they did. I'm not gonna get into those details here. But their goal was to get about 225, as I mentioned, 250, excuse me. Their goal was to get 217 participants, but actually they had 297 that took it. The central office. And by the way, after. Rescissions after people who took it and then decided later that they wanted to stay. They're expecting about 250 to be gone. There were net 257 that took it.
There's 14 that still are within their window for. Deciding that they want to pull it back. So in the end there will be between 243 and 257 NCA staff that take it. There was a stronger participation by those in the central office versus those in the regions or ones. Again, ones is the Office of National Examined Supervision, regions plus ones is what is known as the field. Central office is what you would call generally mission support.
Although the office of examination of insurance, you could argue goes both ways, but. 30% of the folks that were in the central office. So that could be attorneys, that could be the office of cure, where field membership is done. That could be human resources, that could be the office of the executive director. 30% of staff took it at that level, 20% of the field took it. And you could argue that's because there's more senior people in the central office, which is what.
What they said was the case. The, for whatever reason is generally going to be a good thing because they've built up the central office over time and those central office positions are not what you'd, I don't wanna say they're not productive because I fully believe in mission support, but those hours do not directly get spent in credit unions. To do exams, and that's where it impacts credit unions. These people going away, these 20%, they're not gonna be the new folks.
They're not gonna be the people that have been here 10 years. They're not gonna be the people that have been here 15 years, not gonna be the people that are 20 or 23. There were stories of that. I heard of people who wanted to be part of the early buyout but couldn't because they didn't have the 25 years in too. Do early retirement. And by the way, when they do early retirement, they take a big hit on what their retirement is.
But some people may have been financially positioned, some people thought, Hey, I'll take this 50 K kicker and I got a job offer that I can go do something else. 30% of central office folks left 20% in the regions short term. That's a good thing. Long term, that's probably, it's probably better if you're gonna lose some people in the central office, although I did hear they lost all of their human resource supervisors and who's going to process all this paperwork?
You might say if all those folks are gonna be leaving and some of 'em have already left there are going to be situations. And NCA talked about the fact that some places were hit harder and they're working around that. They didn't go into the specifics. And I'll talk about a little bit of that down the road in another podcast. Okay, so they hit their target and then some central office took the biggest hit.
There was some discussion around the hiring freeze that Trump put in place being until at least July 15th, emphasis on July 15th at least. Because once you hit that point in time and by the way, last Trump administration, they indicated, and I believe this is true, that the hiring freeze lasted about a year. Under the hiring freeze, assuming they don't extend it, you can only replace for every Ford jobs that went away.
You can only hire one now that, the problem with saying, okay, they can start hiring and filling positions in July, is that most of these people are on the rolls until the end of the year. That in order to entice people to leave, they said, we will pay you till the end of the year. If you leave, you can just go on leave. If you stay, we'll give you a 50% bonus in your pay. So you're essentially making 50% of what you could to work, but you're getting paid one and a half times.
So they can build up some cash and cash prizes and they can't really replace any of these folks until the end of the year. Now I did a previous post or podcast where I showed you there are no federal jobs out on USA jobs.gov, which is where everybody posts them. It's a long tail to get those. People up and hired. So hopefully at some juncture they're able to say, okay, we get to October, November.
The Trump administration says, yes, you can start hiring for next year, and they can start gearing up. One of the challenges they'll have is they don't have a lot of people in HR right now, so it's gonna be a bumpy road, and that's where the that's where the hard hat could be a problem for some folks at NCUA. All right. I think it'll be less so at n for the credit unions, but you will feel it and we'll get into that in. Perhaps another episode that's coming out.
Alright, so that gets me to the internal realignment that's coming. There's a lot of verbiage that I've gone through and come up with. They talking about potentially streamlining operations alluding to fewer departments, saying that there, at the time there were 23 department heads. What does that mean? That some of them have left? Yes. But I also think it means that they're going to be shrinking.
Some departments, and I'm going to save my details relative to that, to another episode that will be coming out specifically on. The shrinkage at NCUA and the reconfiguring at NCUA. I'm gonna apply what I know for my 34 years at NCUA, my 10 years in the office of the executive director, seven of which as executive director working directly for the NCA board, and I'll walk through. How I think they might realign. 'cause there's some pretty obvious things that I would do if I was there.
And I will probably come up with a a flow chart, a org chart of what I think NCUA should look like moving forward based on what they are planning on doing. They also, it talked about exam cycles being extended for cr strong credit unions. Talked about what, the timeline for the billion dollar to $15 billion credit unions that those can now be stretched up to. Up to every 20 months, smaller credit unions. So smaller being under a billion could be between 14 and 24 months.
And they talked about how that's driven by Camel, how that's driven by management consistency. They made reference to one of their websites on the exam flexibility program, which I want to go do some research on, and I thought, I heard them say that if you're a Camel Three or Newly Chartered, that you'll see us every eight to 12 months. That's different. It used to be six months that you had to have an examination, a follow-up examination at a code three.
It's quite possible that they're, they put that in there. Only relative to full exams because camel threes, fours and fives are gonna get them more frequently. Frequently. But I'm going to be watching what's going to happen to Camel code threes 'cause I'll be very surprised if they don't try and keep those on a six month cycle. 'cause if they don't, that will lead to bigger losses in credit unions. And oh, by the way in the earlier briefing they talked about the insurance fund.
I will have a separate. Podcast on that. They've changed their, they're very excited about their new dashboard. The public can't see all of the dashboard yet. I'm going to look at the old PowerPoints they did and how much they revealed about camel codes and see if they're being as transparent as they used to be. I don't know the answer to that because they only had two sentences on Camel Threes going down. No references to four or five.
They quickly showed the screen on the camels, which would've had some detail about fours and fives. I want to dig into that and I'll have a podcast relative to that to see if I believe that their transparency has stayed the same, gotten worse or gotten better, but stay tuned for that. That'll be a separate podcast coming out as well. They also talked about budget savings of 75 million in 2026, so again.
N NCAA's budget will be tight this year, and that's because they're paying 50 k roughly to everybody who is going away as a lovely parting gift. And I say that tongue in cheek. To encourage someone to leave because of the safety of of their government job. They needed to entice 'em. So I'm it's a little tongue in cheek hey, if you're an NCOA staffer listening to this no, ill will makes sense that they gave you a decent amount of money to make a decision to leave. Et cetera, et cetera.
But $75 million in savings anticipated in 2026. That would be salary, that would be benefits, that would be payments they make to OPM for those benefits that would be travel related to those people who are no longer going to be there, et cetera, et cetera. And they talked about the fact that they will take some of that money, improve their technology. They talked about the fact that they would be. Using that technology to do exams in better ways.
They talked about that some of that money will go back to credit unions in a reduced operating fee, which is good. But again, as I always, I. Like to say, and it's something NCA never really talked about. The cost of the NCA program on a credit union's budget is essentially a little bit less than what credit unions do to train their staff to go to CUNA meetings, America's credit unions, et cetera, et cetera.
And so it's really not all that material even though the trades like to make it a big deal, but it is saving. So I don't wanna discount that as well. And if you're a credit union that would lose money. If but for a reduced, and so a budget, I'm sure you'd rather make money and save a few thousand dollars depending on where you're at in the cascade of assets and the costs of all that. So there was a quote about Less with less, not more, with less.
He's, he helpmann, said, we're not gonna do more with, we're not gonna cut, have less and be able to do more. That's a nonsense type statement. So that's, it's good that they have that reality, but they're re. Rethinking processes. They imply that they've got a good lot of good suggestions from NCOA and they joke that one of the things that they, one of the suggestions from NCA staff that they would not be taking was to have the thermostat at 78 in August. Little bit of tongue and cheek there.
They got a good laugh about that. And what else? Tech and talent and tech and talent investments are coming. They implied that they're gonna have better technology and that they're gonna do hiring and that they're gonna fill some critical roles. They talked about, and I've posted on LinkedIn a little bit, inwe will rise to the occasion.
They are losing a lot of really talented people because if you're eligible to retire, you've been there a long time and they're, they've made reference to executives I know. I've had conversations with some executives who I know are leaving, some I know are staying. I don't wanna get into specifics here but they're losing a lot of really talented people. Let's just leave it at that. But there's people in the wings.
I can figure out who I think might take fu future positions if I was still there, who I'd be saying, Hey, I think you should apply for this job. Not pre-selection, by the way. No. You're just encouraging people to, to participate in the opportunities that are here. And there will be people that rise to the occasion. We used to call that a deep selection when someone's been there a short time, but has a lot of opportunity. May not be perfectly positioned for a position yet.
There's gonna be people that will rise to the occasion relative to that. Alright. That's it in a nutshell here on this first episode. Central office hit harder. Exams hit pretty hard. There's gonna be a realignment coming. I'll have a separate podcast on that. And again, I'm gonna put the hard hat back on. I think NCA staff should be, be prepared for some challenges, but they are up to the occasion. You don't wanna, take a blunt force trauma to the head credit unions your exam.
You might not have the same examiner, you might not have the same supervisory examiner. But the reality is you will have an exam and if you find out that you need some help with that, who to reach out to you can reach out to find out how we help our clients save time and money. With NCUA so that they have a smoother exam process. That's it for this episode. I hope you have a fabulous Memorial Day weekend and that you're somewhere in the country where it's not raining.
As always, I appreciate you listening. I hope you'll listen again soon. This is Mark TriCal signing off with flying colors.