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WASHINGTON-Following Congressman Patrick McHenry (R-N.C.), outgoing NCUA Board Member Debbie Matz told NAFCU’s Congressional Caucus that she squarely disagreed with his view of the mutual savings bank conversion issue. She called him “courageous” for being willing to face such a crowd and fully agreed with the congressman that disclosures should be clear and concise. However, Matz emphasized, “He did not say it should be honest and accurate.” While McHenry insisted NCUA should play the role of umpire in conversions, Matz stated that it should go beyond that. “NCUA does have a stake in the game.” she said referring to the National Credit Union Share Insurance Fund. “Part of that is that members understand that they have deposits at stake.” NCUA is not a trade association, she acknowledged but the agency does have an interest. NCUA’s Risk Alert on indirect subprime lending proves that point. Many in the credit union community have been critical of the extra due diligence-and the associated costs-now required, but Matz defended it saying that the agency goes out of its way not to be onerous. On an upbeat note, credit unions have gotten an outstanding start on what will be a several phase process and a long recovery period to recover from Hurricane Katrina. She commended credit unions for their relief and recovery efforts. Matz stated that NCUA had done “yeoman’s work” with the affected credit unions, as well as those helping out. “We determined that we would do anything we could to make sure no credit union member did not have access to their funds,” she said. She referred to “Phase II” of the recovery process as the “shake out.” Some credit unions will not recover, she hypothesized. In addition, “Obviously, a lot of money is leaving the credit unions and not a lot of money going in,” Matz pointed out. The combination of the two will lead to deposit insurance premiums, she said, which credit unions have not paid in years. Fortunately, she said, “almost every indicator we look at to determine safety and soundness is positive.” But, one indicator is troublesome for her: slow membership growth. According to Matz, much of the growth that is there is because of indirect lending. “We know those people are not `real’ credit union members,” she said. One way to attract new members is through business lending, Matz explained. “Credit unions’ member business lending is not like bank commercial lending,” she stressed. The agency was right in allowing greater flexibility in the area, she said looking back. In concluding her final speech as an NCUA Board member, Matz said, “I’ve been inspired by the spirit.and creativity of the credit unions’ staff.I hope our paths cross again.” She exited the stage to a standing ovation. [email protected]

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