ALEXANDRIA, Va. - In similar letters recently sent to NAFCU President Fred Becker, Jr. and CUNA President Dan Mica, NCUA Board Chairman Norman D'Amours told the trade association executives that their February complaints over sluggish agency FOM expansion procedures would be addressed following a Spring FOM task force report, but added that overlap concerns should have been among their gripes. And in comment to Becker alone-who had asked D'Amours to discontinue his time-consuming, board-rejected practice of asking NCUA regions for overlap analysis in community charter conversions-D'Amours steadfastly resisted, adding that, without the voluntary "safety and soundness" information, he would refuse to vote in the matters. "I believe this is a serious abrogation of NCUA's regulatory and insurance responsibilities under the law," D'Amours wrote to Becker, "and have stated that I will not vote for any community charter conversion without knowing the safety and soundness implications of any resulting overlaps." D'Amours explained that one way he could assess such implications would be through inspection of "examination and supervisory reports," but added that this material alone would not be sufficient. "Therefore," he wrote, "it is necessary that I provide the potentially overlapped credit unions with the opportunity to share their views on the impact of the proposed overlap." Commandeering a Becker charge that member FCUs "...are left with a sense of futility, confusion and sometimes hostility" over D'Amours' extra-official requests for the information, D'Amours went on to write, "I can easily understand these reactions, in fact I share them. This hostility, confusion, and sense of futility did not exist before the NCUA Board, in a 2-1 vote, changed its overlap policy in late 1998...." Welcoming D'Amours' words of support for the federal charter and his assertion that NAFCU's concerns would be considered in the context of NCUA's FOM task force report, Becker demurred, "Norm makes the comment here that they, the members, are left with a `sense of futility, confusion, and sometimes hostility' as a result of the overlap issue. I don't think that's the case at all. They're left with a sense of futility, confusion, and hostility-but it has to do with NCUA's application of the SEG process." In both letters D'Amours concluded by tweaking the representational sensitivities of the two CEO's most critical of his policies, in Mica's case writing, "I respectfully urge CUNA to represent the interests of credit unions, many of which may be members of CUNA, which are being overlapped at an ever increasing rate, by encouraging the NCUA Board to reestablish its policy of providing protection to credit unions whose safety and soundness is jeopardized by unnecessary overlaps." "Do you think there is any possibility CUNA would be willing to take on such an effort?" In follow-up remarks to Credit Union Times D'Amours said that, with his question, he was only holding Mica to a claim he made in a September interview (CU Times, Sept. 15). Commenting on the larger question of the integrity of board majority policy-making and the propriety of foreclosing consideration of properly submitted FOM applications over personal disagreement with official policy, D'Amours was adamant. "I don't know how you would define board policy," he said. "First of all, this is legal....I've checked with legal counsel. There's no question about its legality, and suggesting that it isn't, is just another attempt to divert attention from the issue." "Not only is it legal, in my opinion, it's absolutely necessary. I would be abdicating my responsibilities if I did not do this. I am a...safety and soundness regulator, and I cannot, in good conscience, make a decision that would have an impact on the safety and soundness of the credit union without information about that subject...." "I've got two choices," D'Amours went on. "I can vote against all of these overlaps or I can try to inform myself about the safety and soundness of affected credit unions....I think that's the responsible way to go." Asked if he would not balk if, for example, another board member insisted-in contradistinction to NCUA regulation-on "reasonable proximity" justifications for low-income group applicants, D'Amours said, "I have never questioned the right of a board member to ask any question. There are questions that board members ask that I think are a total waste of time....I don't object to that because it's their right." Contacted for his take on the legality of D'Amours' position, NCUA General Counsel Robert Fenner supported D'Amours. Pressed for an opinion, however, on D'Amours making his participation in duly constituted community charter votes (with overlap implications) conditional on the regions providing "voluntary" overlap information, Fenner said, "I don't recall the chairman ever saying...that he was not going to act in an official capacity...." Read the relevant "I will not vote" paragraph, Fenner said that there was nothing wrong with D'Amours requesting voluntary information from credit unions. Asked if the "voluntary" nature of a practice at odds with board policy might be somewhat undermined by D'Amours' threat to withdraw a third of the board's vote in any conversion request, Fenner said, "Where's he say that? Where's he say that he's not going to vote on the issue unless he hears from every overlapped credit union?" -
gmcorrigan@mindspring.com
