On-Site Coverage: Senators Query Matz About Agency's Handling of Credit Union Woes
Watch a webcast of Matz's testimony here.
WASHINGTON - Senators of both parties asked pointed, though not hostile, questions of NCUA Chairman Debbie Matz about how the agency dealt with the problems of corporate credit unions and whether the agency's examination procedures were adequate.
Incoming Senate Banking Committee Chairman Tim Johnson (D-S.D.) used today's oversight hearings on credit unions as an opportunity to ask Matz if she agreed with the assessment of the recent NCUA Inspector General's report about shortfalls in NCUA examinations that helped lead to the failure of 10 credit unions and asked what the agency is doing to avoid a recurrence.
Matz said she agreed with the report and her agency had increased the frequency and rigor of examinations. She also she asked lawmakers to give the agency additional powers, such as the ability to examine third-party vendors.
Johnson also said he had heard from credit unions in South Dakota about the heavy assessments on natural person credit unions to fund the rescue of corporate credit unions.
Sen. Richard Shelby, the panel's top Republican, asked Matz if she thought credit unions would be able to remain financially viable in light of the increased assessments.
She said credit unions would be able to handle the impact, though it will negatively impact their ROA.
Shelby also asked the agency if it had enough staff members to evaluate the reliability of potential outside investments made by credit unions since the new financial overhaul bill limits the extent to which they can rely on credit rating agencies.
Matz replied that we "might have to enhance our Office of Capital Markets.''
Shelby followed up by asking "what does 'might' mean?'' He asked the agency to get back to him with additional information about the agency's capabilities in this area.
In her opening statement, Sen. Kay Bailey Hutchison (R-Texas) praised the agency for not "burdening the taxpayer'' when rescuing corporate credit unions.