Departures Ripen NCUA for Change
Hyland announced her resignation from the board Sept. 20 after working more than a year after her six-year term expired. Her last day is Oct. 5.
Earlier this year, the Obama administration nominated District Government Employees Federal Credit Union CEO Carla Decker to replace Hyland, but she withdrew her nomination in March after a DGEFCU board member leaked a negative exam report that cast doubt on Decker’s qualifications.
Credit unions shouldn’t look for another nomination soon, said CUNA President/CEO Bill Cheney. He said it was highly unlikely the Obama administration would act before the election, and added that the position wouldn’t be worth the political heat Obama took when he appointed CFPB Director Richard Cordray while Congress was in recess.
California Credit Union League President/CEO Diana Dystrka observed that while replacing Hyland may be a high priority for credit unions, it’s not necessarily a high priority for the White House.
Former NCUA board member turned consultant Dennis Dollar said he didn’t expect Hyland’s position to be filled before Spring 2013.
That delay will mean that Board Chairman Debbie Matz and Board Member Michael Fryzel will have to agree on new regulations and other board decisions until a third voter is in place. This being an election year, the fact that Matz is a Democrat and Fryzel is a Republican would suggest that finding common ground between the two could be a problem.
Not so, Matz said. The chairman said she has a very collegial relationship with Fryzel and that the two work well together and tend to be in sync when it comes to issues.
Matz did acknowledge that a two-member board sometimes requires more compromise to get two votes and recalled her previous NCUA board term when she and Republican JoAnn Johnson were left to work things out by themselves after Dollar left the board in 2004.
“We certainly moved a lot of items on our agenda,” Matz said about the experience.
Dollar called Matz and Fryzel consummate professionals who will handle the situation by acting decisively when they agree, seeking compromise when they can and if they cannot, postponing action so “no major stalemates occur publicly until a third member comes along.”
NAFCU President/CEO Fred Becker and Dykstra both pointed out that historically, Hyland has cast dissenting board votes, while Matz and Fryzel have usually voted in sync. However, Becker said when it comes to some issues, Fryzel and Matz don’t always agree, pointing to tabled regulations on CUSOs and loan participations as possible examples.
Carrie Hunt, NAFCU General Counsel, said Matz works hard to build consensus on issues before bringing them to a vote, and the NCUA has been vocal and accurate when predicting when rules would be brought to a vote. So, when rules don’t make the board agenda as predicted, she said the industry can draw its own conclusion whether or not consensus was achieved.
Hyland’s credit union experience was appreciated by credit union leaders, especially those that run corporate credit unions. Hyland was executive director for the Association of Corporate Credit Unions from 1997 to 2002, then served as senior vice president, general counsel for Empire Corporate Federal Credit Union in Albany, N.Y.
Kathy Garner, president/CEO of the $2.7 billion Catalyst Corporate FCU, was chair of the ACCU when Hyland was selected as executive director of the organization. She said Hyland’s corporate experience helped her understand the value corporates bring to the industry, especially when it comes to payment systems, aggregation and settlement and her perspective “probably helped the NCUA put a plan into place that saved the corporates.” Had Hyland not been on the board, corporates may have experienced a different outcome.
Additionally, Hyland’s credit union background gave her a passion for the position that doesn’t normally come with a political appointee.
Brad Miller, former ACCU executive director and former Southeast Corporate FCU president/CEO, also lauded Hyland’s credit union background. “Her leadership was instrumental in dealing with the system impacts resulting from the financial crisis, the corporate stabilization remedies and many other critical issues.” The Washington-based Miller recently launched his own consulting firm, BLM Strategy Consulting, which provides strategic planning for financial services firms.
Lee Butke, president/CEO of the $5 billion Corporate One FCU, praised Hyland’s credit union background, saying he has nothing but respect and gratitude for the work she did to help corporates through the financial crisis.
Matz said the Federal Credit Union Act allows a board member from the industry but having one board member with credit union experience on his or her resume isn’t required.
Becker said a number of CEOs over the years have asked why a former credit union CEO hasn’t been appointed to the board.
“I always ask them to raise their hand,” he said.
Dykstra said CUNA and its affiliated leagues are considering compiling a wish list of credit union representatives from both parties that could fill open board positions.
“We recognize we need to be a little more proactive,” she said.
But will credit union CEOs volunteer for what lobbyist and consultant John McKechnie called a hard and thankless job?
“While there is a lot of talent in the credit union world, people will think long and hard before offering themselves up in that capacity,” he said.
Matz, however, said while the position is challenging and difficult “because the people you regulate usually don’t appreciate what you’re doing,” it’s also very fulfilling. “If you really care about the industry, it’s a way to shape policy and make sure credit unions have the tools they need to survive into the future.”
The NCUA also faces replacing Executive Director David Marquis, who will retire at the end of this year after 34 years at the agency. Matz said the board has already put together a list of possible candidates, and a new director will likely be promoted from within the agency in November.
McKechnie, who served as the NCUA’s director of public and congressional affairs for five years before joining the Washington-based consulting firm Total Spectrum in 2011, said Marquis brought an examiner’s sensibility to the job along with an appreciation of how to make the agency function as smoothly as possible. Marquis’ replacement will take over during a new era for the NCUA, and post-financial crisis will face a new emphasis on risk avoidance.
Matz said the executive director position has a tremendous influence on the culture of the NCUA. “Even though we have not made a decision as to who will succeed Dave, we have confidence we will select someone who will do a good job,” she said.
Hunt said NAFCU will support and work with whomever takes the position.
“There’s an opportunity here to build upon the relationships we already have with the agency,” she said.
Cheney echoed that sentiment, adding that anytime there is new leadership, there is an opportunity for new ideas.