Metsger Dodges MBL Question in Confirmation Hearing: Onsite Coverage
WASHINGTON — During his Thursday confirmation hearing before the Senate Banking Committee, NCUA Board nominee Richard Metsger dodged what might have been his most controversial question: is raising the member business lending cap a good idea?
The former Oregon state senator responded to the question from Rhode Island Democratic Sen. Jack Reed by saying, “I think it’s a good idea to recognize the purview of Congress to make such decisions.
Metsger was nominated to fill the NCUA Board position vacated by Gigi Hyland, who exited the board in October 2012 after serving beyond her term’s expiration. Following the confirmation hearing, Metsger must receive a majority vote by the full Senate before he is sworn in.
Senator Elizabeth Warren (D-Mass.), who in her first six months in the Senate, has already developed a reputation for asking difficult questions during committee hearings, lobbed an easy one to Metsger when she asked if he still owned his ’57 Chevy.
In his opening statements, Metsger said he bought the car with his first loan, which he obtained at age 19 from Portland Teachers Credit Union, where he served as a board member 20 year later. He did not, Metsger replied, but had he kept it, it would have been a good long-term financial decision because it would be worth so much more today.
Senate Banking Committee Chairman Tim Johnson (D-S.D.), however, did get a meaty answer from the nominee. He asked Metsger what additional steps the NCUA should take to implement lessons learned from the financial crisis.
Metsger said that one of the key lessons is that regulators should be watchful in good times and bad. Additionally, he said the NCUA’s regulations need to be modernized to look for threats in the modern marketplace. Interest rate risk topped his list of threats.
“Credit unions are very involved in the mortgage industry,” he said. “We all know what happens in low rate environments, and you don’t know when, where or how much rates will rise. Look at the last 30 days of mortgage rates or the 10-year Treasury bill.”
Metsger added that if confirmed, he would make sure credit unions are prepared for rising rates. He also discussed credit union access to emergency liquidity.
“Because of the crisis that hit, in the last five years, the Central Liquidity Facility is not subscribed to now by a lot of credit unions,” he said. “All credit unions must have a plan to access emergency liquidity.”
Metsger further said the NCUA must be as contemporary as possible to meet the risks cybersecurity poses to credit unions, which he described as a systemic risk.
Those three questions were the only ones directed at Metsger during the hearing, which featured four other nominees: Rep. Mel Watt (D-N.C.) to serve as Director of the Federal Housing Finance Agency; Jason Furman, nominated to be a member and chairman of the Council of Economic Advisers; and Kara M. Stein and Michael Piwowar, both nominated to be members of the Securities & Exchange Commission.