WASHINGTON — It didn't take long for Michael E. Fryzel to have to defend credit unions before a panel of lawmakers.
The first question that Fryzel, President Bush's nominee to be the chairman of the NCUA Board, was asked at his confirmation hearing was why credit unions should be treated differently than banks, even though credit unions are offering more bank-like services.
"They are cooperatives governed by their members," Fryzel told Senate Banking Committee Chairman Christopher Dodd, (D-Conn.) last Tuesday.
Recommended For You
Dodd, who described himself as a "strong backer of credit unions" had asked Fryzel why credit unions should be regulated differently than banks given that credit unions are offering more of the same services that banks do.
Dodd also expressed concern about the recent broadening of what constitutes a common bond of credit union membership.
Fryzel, a business lawyer in Chicago and former director of the Illinois Department of Financial Institutions, said NCUA should do all that it can to ensure that credit unions are serving their particular communities.
Fryzel told the panel's ranking Republican, Sen. Richard Shelby of Alabama, that while most credit unions were not involved in subprime loans, those credit unions that have gotten into difficulties because of the loan crisis are being very closely monitored.
Except for the two questions from Dodd and one from Shelby, Fryzel mostly slid under the radar screen at the hearing. Only five of the 21 lawmakers on the panel attended the session. Fryzel was the fifth person to speak on the second of two five-member panels nominees to financial-related positions in the government. The bulk of the attention on Fryzel's panel was focused on the three nominees to the SEC.
Dodd told Fryzel and the other nominees that while he "can't predict outcomes" of the confirmation process "we'd like to see if we can get you in there."
In the hall after the hearing, Dodd and Fryzel shook hands and exchanged pleasantries.
In brief remarks to reporters, Dodd said he would talk to committee members about all the nominees but declined to predict any kind of timetable for when Fryzel or the others might be confirmed by the committee or by the full Senate.
In his opening statement Fryzel promised to work to ensure that there is a "healthy and dynamic, arms-length relationship with industry, characterized by active listening, open-mindedness and a willingness to work together to achieve a shared goal of a strong and vibrant credit union industry."
He said his trop priorities would be to ensure the safety and soundness of credit unions and that there are strong regulatory controls to protect consumers.
Fryzel would replace NCUA Board Chairwoman JoAnn Johnson, whose term expired last year but has stayed on at Bush's request. If Fryzel is confirmed, his tenure as chairman could be short lived. Each president has the right to designate his or her own chairman, though Fryzel's term on the board would run through 2013.
While he ran the Illinois Department Institutions, that agency oversaw 700 state-chartered credit unions, which had assets totaling more than $4.3 billion.
Having someone with that kind of state experience would be good for the NCUA board, said Mary Martha Forney, president and CEO of the National Association of State Credit Union Supervisors.
"Having a state regulator brings the perspective of someone from an important constituency to the board," she said in an interview.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
