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Fryzel vows decisive regulation
ALEXANDRIA, Va. (9/18/08)—In what the National Credit Union Administration (NCUA) labeled a “major address” by its chairman, Michael Fryzel vowed a decisive, assertive regulatory approach to preserve confidence in the credit union system. “Where I see a balance sheet problem, I will move decisively to resolve it. Where I see adverse trends, I will take steps to correct them. And where activities carry unacceptably high levels of risk and expose consumers to potential loss, I will intervene decisively,” Fryzel said. He announced a comprehensive stress test of the National Credit Union Share Insurance Fund, aimed at determining the Fund’s strength to withstand stresses that could develop as a result of credit and mortgage dislocations. Fryzel said his experience as a former state regulator of credit unions has formed his philosophy that regulations should create a climate for credit unions "to function as strong, dynamic, consumer-oriented financial service providers." He stated that "like every other financial institution in these turbulent times, corporate [credit unions] have faltered" and ”must regroup and regenerate themselves to withstand the balance of this economic downturn." The chairman added that the NCUA is committed to maintaining the integrity of the corporate network and is actively monitoring the corporates. It will take ”all necessary measures" to "restructure, reenergize and maintain the corporate system as a viable entity,” he said. "I expect every [credit union] trade organization, every credit union volunteer and professional to render their full support to our efforts to keep the corporate system vibrant and member driven. As a result of the volatility in the markets, I have been required to take aggressive measures that will institute an ounce of prevention as we move through the remainder of the year," Fryzel said. He noted Congress’ interest in credit unions now and said that he is keeping lawmakers well informed about the corporates. Fryzel also said his agency is currently expanding Vice Chairman Rodney Hood's risk mitigation efforts, and is organizing a high level industry summit with the trade associations on the ramifications of "continued volatility in the credit and mortgage markets and to identify measures to mitigate the impact." He made his remarks at the National Association of Federal Credit Unions Congressional Caucus in Washington, D.C. Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said Wednesday that CUNA will be working closely with the agency to help address these issues.
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