Mulvaney interrupted Fazio, asking whether the NCUA's current online exchange provided a value similar to the in person meetings discontinued six years ago. Fazio conceded that in person meetings were valuable. Mulvaney also grilled Fazio about the NCUA's 2016 budget hearing; Fazio replied the board has not yet determined if it will conduct one.

Mulvaney returned to his original question, noting that the committee had first asked about the open meeting's discontinuation on April 8, 2014.

“It's been a year since we asked the question, and an answer any time in the next nine months would be great,” Mulvaney said sarcastically. The representative made it clear that the committee would not wait for another year.

But the NCUA did respond in 2014, Public Affairs Specialist John Fairbanks said. During that meeting, Mulvaney asked NCUA General Counsel Michael J. McKenna about the NCUA budgeting process, which included the release of only aggregate figures, and why line-by-line detail was not provided.

McKenna, in a July 17, 2014 response, described the NCUA's budgeting process, noting that the agency's commitment to transparency included detailed formal memorandums presented to the board and posted to NCUA's website.

However, the agency's effort are still not adequate, according to NAFCU's VP of Legislative Affairs Brad Thaler.

“While NCUA has responded to Rep. Mulvaney's initial question, they still have not provided the appropriate details or taken the appropriate measures for budget transparency,” Thaler said.

The turbulent exchange Wednesday marked a meeting in which regulators from a variety of agencies were called on the carpet to explain past disciplinary actions and the growing weight of regulatory burden, especially on small community banks and credit unions. Fazio testified about the NCUA's regulatory relief efforts and other initiatives the agency planned on taking within the coming months.

“NCUA employs a variety of targeted strategies to protect the safety and soundness of credit unions, members' savings, the Share Insurance Fund and taxpayers,” Fazio said. “We strive to balance maintaining prudential standards with minimizing regulatory burden.”

Regulatory reform should stand at the forefront of each agency's agenda, especially for smaller institutions, Chairman Randy Neugebauer (R-Texas) said at the proceeding's opening. The NCUA cannot afford to dismiss the committee's expectations in this area, he added

“Credit unions are in the midst of moving to their own new capital structure that could result in considerable cost,” Neugebauer said. “Operation Choke Point has severely fractured any trust in the supervision and examination process between financial institutions and regulatory agencies.”

Neugebauer specifically questioned Fazio on the agency's current push for risk-based capital, noting that NCUA Board Member J. Mark McWatters questioned the rule and NCUA's legal authority to impose it on the credit union it regulates.

“Do you have the confidence that NCUA is getting this right?” Neugebauer asked. Fazio countered by saying that the agency spent a lot of time and effort with the proposed rule's first and second iterations. He also noted that the agency had done considerable research on risk-based capital, including the legality of the rule itself.

“We're confident that what we're proposing is within the legal authority of the NCUA board,” Fazio said.

Fazio also noted the practice of credit unions maintaining a capital cushion above the well-capitalized minimum is an institutional preference, not a regulatory requirement. As currently proposed, Fazio said the rule would affect the 1,400 credit unions that have more than $100 million in assets. Only 29 would fall below the well capitalized level if the rule was implemented as currently written, the regulator said, and those credit unions would require approximately $53 million in additional capital to comply. Fazio described the amount as relatively modest, explaining the 29 outlier credit unions collectively hold $13 billion in assets.

Fazio's testimony revealed the NCUA board will finalize a rule next week to simplify how federal credit unions add associational groups to their fields of membership.

NAFCU SVP of Government Affairs and General Counsel Carrie Hunt voiced opposition to what Fazio said in a written statement issued during the proceedings, including the bid for the agency's third-party vendor examination authority, which the trade group deemed as unnecessary.

“Additionally, we disagree with NCUA's contention that its second risk-based capital proposal represents regulatory relief for credit unions,” Hunt wrote. “NAFCU and our members firmly believe this proposal is unnecessary and will only impose more regulatory burden on an already extremely well-capitalized industry.”

Hunt also applauded Mulvaney's recently issued NCUA Budget Transparency Act, which would require the Government Accountability Office to study almost every aspect of the agency's budgeting process, as a way to help the agency promote more budget transparency in the future.