The Opportunities at the Change of NCUA Leadership

While short-term problems still exist, the Agency can participate in a mutual effort to create a credit union system for the 21st century. That priority would be a refreshing start.


As Deborah Matz is sworn in as the new NCUA Chair today, we take a glance at the issues, challenges and opportunities immediately facing her.

Every new leader brings some elements of change.  But in credit unions today, the confirmation of Deborah Matz is especially timely. Moreover there are many positive trends on which to begin her tenure:

  • Credit union performance at June is extraordinarily resilient with record levels of liquidity, ROA of 55 bps, the highest amount of loan originations for any six-month period and continuing share growth of almost 10%.
  • The economy is improving, confidence is returning and many are seeking ways to promote more loans.
  • The industry’s resources are more than adequate to structure patient resolution of both individual and system-wide problems.

New leadership brings choices.  There will immediately be crossroads about whether to continue as is with Agency activities or to identify new paths.

Some Questions for Setting an Agenda 

So as the Chair assembles her leadership team, the following are some of the questions that could be a foundation for renewed dialogue with the credit union system:

  1. How can the credit union system better support the country's need for real estate loan modifications and other solutions to keep members facing hardship in their homes?
  2. How can the NCUSIF be utilized to help credit unions in areas of continued economic challenge through access to capital notes; with this temporary capital they can continue to not reduce loans to shrink the balance sheet.
  3. What are different ways that the credit union story can be told so that the public, the press, other regulatory agencies and any organizations seeking new financial partners know about the option of cooperative finance?
  4. In the current regulatory reform debate, how can the existing system of CLF and corporates be designed so that credit unions have access to secondary markets and long-term liquidity through their own structures?
  5. What are ways that the Agency in its own communications can be more open, transparent and willing to listen to views that may not reflect the internal consensus of staff?
  6. What is the status of the audits of the NCUSIF/US Central?  What is the nature of the uncertainty and how can the owners of these agency managed resources be assured that decisions are being made in their interests?
  7. How can the member-first practices of credit unions be amplified so the industry's role in providing fair and reasonable credit is more widely understood in a time of concern with consumer protection?
  8. How can confidence in the corporate network be re-established so that the credit union system does not lose a critical component of its distribution and liquidity capability?
  9. What steps can be taken to enhance the unitary structure of CLF-NCUSIF-Charter at NCUA to avoid the precedent of the thrift industry that had their common structure split asunder?

Many Issues: Better Solutions 

Chairman Matz' board term is a limit of six full years. This gives her time to implement long term strategies. For cooperatives, time is an ally. Capital comes through earnings. Earnings come through lending and serving members.  Many other financial institutions must still worry about priorities other than their customers.  

While short-term problems still exist, the Agency has the opportunity to participate in a system-wide effort to adjust the credit union model for the 21st century. That priority would be a positive beginning. 




Aug. 10, 2009


  • Chip,

    I think Deborah Matz will make a much better Chairperson (not much of a bar to jump over in the first place over the incumbent), but I REALLY hope she doesn't have a 6 year career there. If it happens, this country will be destroyed from the top and it won't make any difference.
    Larry Hoffman
  • This analysis leaves me flat and slow on the uptake. That being said, I couldn't have done better.

    I would have liked to read something that carries more urgency: “Matz Arrival Just In Time to Clean-up the Mess!”, or “Who Cares ? Who Turns Out the Lights?”, or “New Face, Bored Audience, and Now Back to the Game”, or……

    The point is - what are one to two things that need to be done now ?

    1. Restore confidence in credit union stakeholders that they have a regulator vested in creating a competitive differential for charter holders and sound practice.

    2. Show the marketplace that our regulator understands the needs of a non-profit cooperative industry over the cookie cutter text book for regulating financial service organizations.

    I understand that a regulator is not a trade organization – but every vested player must have these two goals in mind, and influence the outcomes from their perspective and contribututions.

    If we do not start to push for a real understanding of the value of the business charters we promote, then what is the point of declaring ourselves an alternative – it starts with having the differences highlighted, leveraged, and visible to those who create a marketplace differential that is then valued by those promoting themselves as experts and overseers of its future.