“The NCUA can and should reduce the operating budget and improve its budget process,” McWatters said during the conclusion of his statement. He also called the agency's efforts to fund its operations “misguided.”

NCUA Vice Chairman Rick Metsger later attempted to clarify that the board never actually had a budget hearing and instead held a budget briefing. 

After McWatters' statement, Matz said, “There's so much misinformation in that statement, I won't even attempt to refute all of it.”

She said McWatters' claim that the agency is “shutting the door” on an 18-month cycle is erroneous.

“We are looking at an extraordinary amount of reg relief, it's inappropriate and irresponsible to do reg relief and increase our exam cycle,” she added.

The heated exchange continued when Matz said, “It's rather extraordinary to be accused of manipulating our exam hours to influence the OTR. I have to say I am not totally shocked by that, for questioning the integrity of the agency.”

“I didn't say that,” McWatters said.

“Yes, you did, by inference,” Matz said.

Matz also said McWatters' discussion on dialog with the board is a result of his lack of participation on the board.

“It's interesting that you set yourself up as the spokesman for the credit unions,” Matz interjected.

Matz later told McWatters that he does not attempt to understand the issues, how the examination process works, or why some of the agency's decisions are made in the interest of safety and soundness.

“Any board member who wants information from the staff, you will get it,” Matz said. “You might not agree with it, but you will get as much information as you want, on any subject that you want. And clearly some of the things said here today, without a doubt, you have no understanding about some of the issues that you are criticizing.”

Trade groups also criticized the budget process in statements released after the meeting. Dan Berger, president/CEO for NAFCU, said, “The agency has not held a public hearing on its budget in six years, and credit unions deserve the chance to be a part of the process that they ultimately fund.”

CUNA also expressed concern that the NCUA increased its budget for the ninth year in a row. Jim Nussle, president/CEO for CUNA, said in a statement, “We believe the agency needs to monitor and modernize resources to maximize funds and contain costs.”

While the budget ultimately passed by a two-to-one vote, with McWatters voting against it, the field of membership proposal moved forward with all three board members voting in favor of it.

In her opening statement on FOM, Matz said, “[I]t's clear that the federal charters need a rule that is more permissive than any rule we've approved in the past, yet stays within our statutory authority.”

While he voted for the FOM proposal, McWatters cautioned, among other things, that the proposed rule does not address whether Internet communities may establish their own credit unions or be incorporated into existing credit unions.

Incoming American Bankers Association President/CEO Rob Nichols previously blasted the proposed changes in a letter penned to Matz. In the Nov. 18 letter, he said the proposal steps outside the bounds laid out by Congress and allows credit unions to move even further away from the narrow common bonds that define their mission.

Nichols' letter prompted credit union trade groups to rebut; in response, Berger said NAFCU was disappointed the ABA chose to attack the proposal before it was released and details were known.

In the same vein, Brad Thaler, vice president of legislative affairs for NAFCU, had strong words for bankers attacking credit unions. He said in a Nov. 20 statement that bankers “should have paid this much attention to their own members and actions prior to the financial crisis.”

Despite his criticism toward bankers, he called for collaboration between the two groups to seek regulatory relief and better data security.

“We would prefer to work together with them to bring about reforms that will help both of our members,” he added. “We hope the bankers will focus on these meaningful efforts with us.”

Included in the proposed field of membership rule, among other things, is a modification to the definition of service facility for multiple common bond credit unions to include a transactional website or mobile platform that, at a minimum, accepts deposits or loan applications, or disperses loans.

The rule would also grant FOM regulatory relief to state chartered credit unions.

The rule didn't propose expanding the community charter core area population limit beyond 2.5 million. However, the plan would expand the rural district population limit to one million, regardless of the state in which the majority of the district's population is located.

Berger applauded the changes in a statement.

“As commerce and consumer behavior continue to rapidly evolve with innovative technologies, we are pleased to see that the agency listened to our member credit unions' suggestions on how to keep pace with today's marketplace,” he said.

Similarly, Nussle called the proposed changes “sensible” in a press release. He said the rule “stays within the confines of the Federal Credit Union Act all while ensuring American consumers are allowed more options when choosing their financial service provider.”

Dennis Dollar, former NCUA chairman and principal partner for Dollar Associates, told CU Times some credit unions will be disappointed by some of the items left in place.

“…[T]hey left in place the arbitrary population caps for MSA communities and, even though they increased them, for rural districts,” Dollar said. “They could have gone further under the statute in these areas and several others such as allowing reasonable proximity for physical presence in an underserved area.”

While a 73.1% overhead transfer rate increase was approved, the transfer of authority to set the rate drew criticism from NASCUS CEO Lucy Ito. In a press release, she said the NCUA is “foregoing responsibility for safety and soundness as the charterer of federal credit unions” by shifting “virtually all” safety and soundness-related expenses to the share insurance fund overhead rate.

She added that once the issue is published to the Federal Register in January, public comments may provide a clear picture as to “how and why the agency assigns all safety and soundness expenses to the OTR.”

Both Nussle and Berger urged the agency to move back to an 18-month examination cycle for low-risk credit unions. Matz said in the meeting that she would consider looking at the issue next year. McWatters, however, questioned why the agency must wait to offer additional regulatory relief instead of looking at the issue now.