“When I came in, Board Member Fryzel had been the chairman and I just did not feel it was appropriate for him to be the third member and have a vice chair. It would be somewhat disrespectful so I thought it would be better to wait until he left,” Matz said.

CU Times asked Fryzel on Wednesday for his response to Matz's comments. Fryzel said the full board is required to designate Metsger as vice chairman.

“I'm not going to question her timing on doing something that was a decision made by her as to when she wanted to do it. I think what's come into question is the legality of how it was done. I think it's very specific in our regulations that the second member to be vice chairman is a designation by the board,” Fryzel said on Wednesday.

“Now, certainly, the chairman puts forth the name of the individual she would like to be vice chairman and I have no problem with the name she has put forward, but that should have been brought to a board meeting for a board vote and that was not done. It's very clear that's how a vice chairman is selected,” he added.

“The Federal Credit Union Act is silent on the vice chairman issue. The Act gives certain functions to the chairman and talks about assignments and responsibilities. It doesn't mention vice chairman. When the act is silent, it cannot trump a regulation that is specific to the vice chairman issue,” Fryzel said.

“Once the regulations are put into place, they have the impact of law. You have to abide by the regulations. If the NCUA is going to ask credit unions to abide by the regulations we put forward, we must abide by the regulations we have in place. We cannot overlook them,” he added.

According to section 790.2 of the code of federal regulations, “the chairman shall be the spokesman for the board and shall represent the board and the NCUA in its official relations with other branches of the government. A second member is designated by the board to be vice chairman.”

Relaying information from the NCUA Office of General Counsel, Public Affairs Specialist John Fairbanks said the Federal Credit Union Act, which legally trumps federal regulations, allows the NCUA Chairman to define each board member's area of responsibility, regardless of the regulatory language.

Fairbanks said the legal basis of the appointment comes from 12 U.S.C. §1752a(e), which states the “Chairman shall determine each Board member's area of responsibility and shall review such assignments biennially. It shall be the chairman's responsibility to direct the implementation of the adopted policies and regulations of the board.”

Fryzel will not be voting in the September board meeting. At press time, the White House had not confirmed reports that McWatters resigned from his job as dean for graduate programs at Southern Methodist University's School of Law in Dallas and will be sworn into office this month.

Fryzel said Matz was given “poor legal analysis” and regardless of the political party in power, the vice chairman has to be designated by the full board.

“The legal research on this was not done properly,” Fryzel said. “The advice given to the chairman was not good and as a result of it, we've got a situation that needs to be corrected.”