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Fryzel details intense start to NCUA career
WASHINGTON (10/13/09)—Financial failures, market crashes, and the overall economic impact on individual credit unions and the corporate credit union system punctuated what was a “very intense” beginning to his tenure as National Credit Union Administration (NCUA) chairman, and the board had to make many tough decisions during that time, current NCUA board member Michael Fryzel told News Now. “We faced many problems,” but once those problems were laid out for credit unions “the industry was able to pull together” and handle those problems from within, without the need for direct government assistance, Fryzel added. Working to ensure the viability of the corporate credit union system and, in turn, of individual credit unions was the greatest accomplishment of his tenure, Fryzel said. However, Fryzel added, he regrets not having a long enough tenure to adequately address some internal NCUA issues and make certain improvements to the NCUA staff. Having both a former chairman and former board member turned chairman on the NCUA board--as is now the case--is an unprecedented event. Fryzel said that the combination of himself, NCUA Chairman Deborah Matz, and board member Gigi Hyland gives credit unions the “most knowledgeable and credit-union-familiar board that has ever been in charge of the NCUA.” Fryzel expressed his confidence in Matz’s ability to “move forward with what needs to be done” and keep the agency moving in the “right direction” while continuing to address the needs of natural person and corporate credit unions. The NCUA continues its work toward the creation of its own consumer protection agency, and while Fryzel said that he cannot comment on how that agency would interact with the Obama administration’s proposed Consumer Financial Protection Agency (CFPA), the NCUA plans to have its own safeguards in place so that it can “make the argument for credit unions.” An NCUA’s consumer protection agency should not create “significant additional costs” for credit unions, he said, adding that he did not think that the CFPA, if approved, would create additional burdens for credit unions. Of member business loans, Fryzel said that there is a “niche” for some credit unions to offer business loans to their members, and does not oppose lifting the member business loan cap as long as credit unions make them “carefully and with the full understanding of how difficult those loans can be.” The NCUA should also be allowed to “put in place the necessary rules that will ensure the safety and soundness of the funds of the credit unions that are making those loans,” Fryzel added. The NCUA’s recent town hall meetings, which took place in 3 sites nationwide, have given the board “excellent” feedback, and the board is reviewing comments as it develops its new rules for corporate credit unions, which are expected to become permanent in early 2010. While he expects credit unions and the nation in general to continue to see financial hardship in the near future, Fryzel said that credit unions remain the “premier source” of financial services in this country, and will continue to serve their members into the future. Read the Oct. 19 issue of CUNA's Credit Union NewsWatch for more of Fryzel's views on credit union issues, including the future of alternative sources of capital.


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