The recent brouhaha involving the designation of NCUA Board Member Rick Metsger as its vice chairman is a classic example of failing to do all the research required before rendering an opinion.
Chairman Matz, as she always does, asked if she had the authority to take certain action. In this case it was to designate a board member to be vice chairman. She was told the Credit Union Act, while silent on the vice chairman position, gave her broad latitude to make such a designation.
There is a reason why in the Credit Union Act there is no mention of a vice chairman position. That is because it was not created by an act of Congress, but rather by board action many years ago when they amended the NCUA rules and gave the authority to designate a vice chairman to the entire board.
The argument that the act states, “The chairman shall determine each board member's area of responsibility and shall review such assignments biennially,” and therefore gives her the authority to designate a vice chairman, is not legally sound since Congress never intended it to be used to justify an office it never created. The assignments and responsibilities it refers to have historically been the chairman having each board member act as the liaison to such groups as the Defense Credit Union Council, NASCUS and NeighborWorks America.
The real reason why the position of vice chairman was created was strictly political. The then chairman did not have the support or vote of the other Board member of his political party so he reached an agreement with the minority member to designate him vice chairman, ensuring his vote and support on promoting the chairman's agenda.
The most recent activity was further complicated when it was pointed out that a rule existed which was specific on the designation authority. Unfortunately, the chairman was incorrectly told the Credit Union Act trumped the rule and therefore prevailed.
Such advice would have been accurate had the act contained language relating to the appointment of a vice chairman. Since it did not, the rule became the law and what it said governed any action to be taken.
The NCUA, however, persisted saying the chairman had clear authority to designate a vice chairman. On the NCUA's website, the vice chairman title was place under Mr. Metsger's name, his picture outside the board room was taken down so the new designation could be added to it and a new name plate was ordered. Very efficient but slightly premature.
And then common sense began to prevail, as the news media and others pointed out that the chairman cannot solely designate a vice chairman. There was the realization that the advice given to the chairman was incorrect and flawed. The NCUA then said the full board would consider a designation as required by law. The right move to correct a wrong.
As an aside comment about the individual waiting in the wings to accept the designation when properly done, my former colleague and friend, Rick Metsger, is without question eminently qualified to hold the position of vice chairman. The missteps made requiring the board to now do it right, in no way reflects on his qualifications and ability to assume that job. I applaud his posture and demeanor during this unfortunate episode.
Perhaps to put this in perspective we need to look to ancient Roman history and follow the slightly revised quote, “Render unto Caesar the things that are Caesar's and to the board the things that are the board's”.
Michael E. Fryzel
Attorney and former NCUA Board Member
Chicago
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