Expressing supportfor the Senate bill that would require budget hearings, NCUA BoardMember Mark McWatters said the NCUA should lead on the issueregardless of how other agencies handle the budget process.

In a letter sent to the Senate Banking Committee on Friday,Larry Fazio, NCUA director of examination and insurance, noted thatno other financial regulator is subject to a requirement to holdannual budget hearings. Fazio was responding to a series ofquestions from Senate Banking Committee Chairman Richard Shelby(R-Ala.) following his testimony at a hearing on Feb. 10.

McWatters argued that budget hearings would not compromise the independence of theNCUA.

“All decisions regarding the NCUA budget are made by the NCUABoard. Receiving input from the credit union community – the peoplewho finance NCUA's budget – will in no manner whatsoever threatenthe independence of the agency or the safety and soundness of theShare Insurance Fund. The mere suggestion of regulatorycapture arising from a budget hearing constitutes a disingenuous,red herring,” McWatters said.

The bill, introduced by Senate Banking Committee members DeanHeller (R-Nev.) and Mark Warner (D-Va.), would also make the draftof a detailed business-type budget publicly available before thefull board vote.

According to NCUA Public Affairs Specialist John Fairbanks,“Chairman Matz strongly opposes the bill, as it would undermine theindependence of the agency and lead to regulatory capture.”

McWatters said if a credit union leader speaks to an NCUA boardmember about the NCUA's budget in the board members' office or overa meal, no one would classify that interaction as regulatorycapture.

“But, somehow, if that same credit union member speaks to theNCUA board in a public hearing, on the record, before the camerasand microphones, that communication constitutes regulatory capture?Such analysis defies logic and common sense,” he said.

McWatters called for budget hearings at a board meeting in November of 2014, wherehe voted against the NCUA's $279.4 million 2015 operatingbudget.