At the recent hearing of the U.S. House of Representatives Financial Services Financial Institutions Subcommittee on credit union regulatory burdens, a credit union trade association proposed that the size of the NCUA Board increase from three members to five members.
One of the reasons given for that change was to allow for greater representation on the NCUA Board by individuals with credit union experience, including someone who is a state credit union regulator.
Some people would say that Washington and government generally follow the philosophy of when you think you have a problem, throw more money at it and it will be solved. I am of the opinion that the testimony given promoting the idea of an expanded NCUA Board was driven by such a belief.
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When the NCUA Board most recently had three members, it had more credit union experience than ever before. Two had served as credit union attorneys, one worked for a credit union, one worked for a corporate credit union, one was a former state regulator, one had previously served on the NCUA Board and two had served as board chairman. And they all fully understood and supported the cooperative principles of credit unions. Can you possibly get any more credit union experience than that?
Moreover, an overriding consideration in selecting board members is that the regulator be at arm's length from the regulated. Could it be that some people do not like the legal requirement of having only one individual with direct credit union experience serve on the board?
Trade associations diligently review the NCUA budget by line item and even though they may advocate strong, fair regulation, any increase, as small as it may be, is too much. I wonder what they would say to the added cost of two more board members, their staff and other related costs. Maybe nothing, if they were allowed to name the board members, but the odds of that happening are probably even greater than the Chicago Cubs winning the World Series.
Michael Fryzel
NCUA Board Member
Washington, D.C.
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