President Obama's pick to chair the NCUA, Deborah Matz, will oversee the regulation of an industry that has been sharply affected both by the recession and management and structural changes in recent years.
But her experience in the credit union movement-including three years on the NCUA board and two years as chief operating officer of Andrews Federal Credit Union-combined with her strong political connections, could help her navigate the difficult times ahead.
"It takes most people six to nine months once they start running an agency to know who the players are and what are the key issues. She'll know right off, and that will really help both her and the agency," said Geoffrey Bacino, a former NCUA Board member who was also in the running for the chairmanship. "She has strong opinions but is a good listener. She is fair, but firm."
Matz, a 58-year-old New York City native, was named to the NCUA Board by President Bush in 2002, at the recommendation of then-Senate Majority Leader Tom Daschle (D-S.D.). During her tenure on the board, which lasted until 2005, she was especially concerned about the health of small credit unions and worked to strengthen the agency's efforts to help them and deal with regulations.
In reaction to the announcement, Daschle said, "I've known her and [her husband] Marshall forever. She has a keen intellect and is persistent and that's an important combination in getting things done."
"She's determined, ambitious and will be an effective regulator of and advocate for credit unions because she's good at marketing and strategizing and has a great network in Washington and around the country," he added. "Those skills and attributes go a long way."
One of her initiatives while on the board was the Partnering and Leadership Success program, which is a vehicle through which credit unions share ideas for improving member services and for reaching out to all people within a field of membership.
Former NCUA Chairman Dennis Dollar cited her work on that and other projects as evidence of political and policy expertise.
"I appreciated both her innovation with PALS but also her willingness to make it part of a bipartisan agency initiative, rather than her own individual program. Debbie Matz is a consummate professional with a good head for what it takes to make a program work, and she analyzed quickly that PALS would be more successful as a component of Access Across America rather than as its own separate program," Dollar recalled in an e-mail.
Lobbyists who dealt with Matz while she was on the board said she was always amenable to listening to their concerns. But one board practice that the trade associations like, having a public hearing on the agency's budget and allowing comment from the industry, could be in jeopardy.
"Those being regulated will always advocate having the smallest budget possible. When I told regulators at other agencies about that process, they were horrified," she told Credit Union Times last year.
For part of her time on the board, there were only two members-Matz and Chairman JoAnn Johnson-and they had difficulty reaching consensus because while they got along well personally they had strong philosophical disagreements.
"Her actions were always heartfelt and she was great at reaching out to credit unions. And within the agency she knows the value of good staff and how to get the best out of people," Johnson said. "When we disagreed, it was always in a civil manner, there was never a terse word between us."
Bert Ely, a longtime consultant to and analyst of the financial services industry, said all of Matz's skills will be needed because of "the potentially earth-shattering changes in the credit union world" resulting from the losses to credit unions because of the losses to the NCUSIF triggered by the problems of the corporates.
"If you have many credit unions experiencing large losses, the merger opportunities are reduced. For some credit unions to survive as financial institutions, they would have to convert to mutual savings banks and that reduces the size and strength of credit unions," he said.
Because regulatory positions are often as much about politics as they are about policy, Matz will be helped by the fact that her ties within the Democratic Party are broad and deep.
She held senior posts in the U.S. Department of Agriculture during the Clinton administration and before that was a longtime Democratic staff member on Capitol Hill. She was an early backer of Obama and contributed $2,300 to his presidential campaign in March 2007, when he was considered the underdog in the fight for the nomination. Through her husband-Washington lawyer and lobbyist Marshall Matz-she has a close connection to Daschle. Marshall Matz spent two years as a lawyer at South Dakota Legal Services during the early 1970s. He was also one year ahead of Senate Banking Committee Chairman Christopher Dodd-whose panel will handle Matz's confirmation-at the University of Louisville Law School.
Since 2003, the Matzes have contributed $62,050 to political candidates and committees-Deborah only to Democrats and Marshall mostly to Democrats but to some Republicans as well-according to data compiled by the Federal Election Commission.
Daschle's former top aide Peter Rouse-who was Obama's top aide in the Senate-is now a senior adviser in the White House.
If confirmed by the Senate, Matz would succeed NCUA Chairman Michael E. Fryzel, an appointee of former President Bush who has held the job since last July. He will remain on the board as his term expires in August 2013. Matz would take the board seat of Vice Chairman Rodney Hood, whose term expired in April but who has been serving pending the confirmation of a successor. Board Member Gigi Hyland has been on the board since 2005, and her term expires in August 2011.
–cmarx@cutimes.com

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MATZ: CU and Political Experience Will Likely Aid Potential New Chair

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