The negative vote by NCUA Board Member Mark McWatters on theagency's 2015 budget sent a clear and resounding message to theoccupants of 1775 Duke Street and the credit union industry.

While acknowledging the important functions of the agency andthe work done for the benefit of credit unions, McWatters clearlyand pointedly put in perspective the problems that remain in thebudget process currently employed.

He bemoaned the fact that the process lacks the input of theindustry paying the freight on the budget and suggested additionaldetail be provided in the material distributed to support thenumbers. Calling for a return to public hearings on the budget,McWatters cited the need for the industry to be able to expresstheir opinion of the programs in place and the cost that NCUAclaims are mandated or necessary.

When I arrived at NCUA in 2008, years of budget reductions hadleft the agency void of the personnel and resources needed to dothe job. Additional examiners, office staff, computer systems andother support was needed to get NCUA back up to speed while dealingwith an un-paralled crisis in the corporate credit unionsystem.

The industry was told what we felt was needed. They madecomments on what we were proposing; we listened and adjusted thebudget accordingly. The industry had the opportunity to voice theiropinion and NCUA got the budget increases we wanted.

It took a few years to get the expertise, staff and supportneeded to ensure that NCUA had the resources to be an effective,efficient and responsive regulator in the financial servicesindustry.

Last year and again this year I said it was my belief that NCUAhad reached an adequate level of staff support and dollar amount.Other than union contract mandated and merit salary increases alongwith increases in items such as travel and utilities that NCUA doesnot have full control over, the NCUA budget should not increase. Itwas time to step back, re-allocate where needed and hold the line.The Board, at some point, must say enough is enough and help stopthe widespread belief and perception that government never stopsgrowing.

Board Member McWatters has seen through the massive amount ofpaper generated to justify a budget that deserves every bit ofcriticism he has leveled against it.

A regulator must have the resources they believe are required todo their job. If NCUA believes they need additional personnel andline item increases, an open and honest discussion should takeplace.

What is also required is the necessity to justify theirrequests, answer the questions raised and clearly show that itcannot be done with the resources currently in place.

It is a simple process. It begins with true transparency andcontinues with open and honest discussion. Just maybe it can nowbegin.

And all it took was a simple, but brave, no.

Michael E. Fryzel

Attorney and former NCUA board member

Chicago