In response to another question, NCUA Deputy Executive Director Larry Fazio said the agency had no timeline for releasing U.S. Central from conservatorship and said it depends on a variety of factors, including the ability to deal with its capital problems more effectively.

Last week's session was the second of three meetings that the agency scheduled last summer to seek input on rules changes for corporate credit unions that the NCUA Board is expected to consider at its November meeting. However, because it was the first meeting since the board's Sept. 24 decision to assess a 0.15% premium to replenish the NCUSIF and to pay for the Temporary Corporate Credit Union Stabilization Fund, attendees raised a variety of other concerns about the current and future health of the credit union system and of the NCUA's handling of the crisis.

Michael Beall, president of the Maryland/District of Columbia Credit Union Association, asked whether the agency would assess its own job performance.

NCUA Chairman Debbie Matz explained that the primary focus was getting through the crisis and moving forward.

Beall said he was concerned whether the agency had the "capacity and talent pool to handle this." He also complained about the fact that several key positions in the Region 2 office were being filled by temporary replacements because the regular staff members had been detailed to other regions, which have been experiencing more problems because of the recession.

Matz, who began her chairmanship in August and served as a board member from 2002-2005, said the agency's budget has been cut every year during the past several years and it is an "ongoing process" to get it back to the staffing levels it should be. She also said some of the personnel shifts had amounted to "robbing Peter to pay Paul" and she hoped to fill the vacancies soon.

Other attendees raised concerns about how credit unions could have access to more capital, while balancing concerns about safety and soundness.

Suncoast Schools Federal Credit Union President/CEO Tom Dorety said it seemed clear that the capital problem wouldn't be dealt with "until most of us in the room die or retire." He asked Matz if the agency was prepared to work with the trade associations (Dorety is a board member and immediate past chairman of CUNA) to go to Congress and the Treasury on the issue. He said the capital was needed so that some credit unions thrive, not just survive.

Matz said the most important factor for the agency is the safety and soundness of the credit unions, but she said her position on the subject has "evolved" and she is now "open to the idea that credit unions can look to other sources of capital."

She added that the key is ensuring the transparency of investments and making sure it is done in a way that protects the member. It needs to be made clear that that the capital investments aren't insured. She said if they don't issue the proper warnings, there is a strong reputation risk to the system.

In response to another question, Matz said her agency wasn't planning to seek advanced payments of premiums to shore up the NCUSIF the way the FDIC Board recently did because of the increase in bank failures.

In response to questions about the rules changes on corporate credit unions, Fenner reiterated past statements that while the proposed rules are still being formulated, they will focus on addressing issues such as capital problems, including forcing corporates to keep more in retained earnings. He also said they would address governance issues, including requiring a majority of corporate credit union board members to be the CEO, chief financial officer or chief operating officer of a natural person credit union, annual disclosures of the compensation packages of top executives, and a ban
on golden parachutes for departing executives.

The meeting, attended by approximately 150 people, was held in a windowless room at a hotel that overlooks the Potomac River in a new commercial development in suburban Washington. Board Members Michael Fryzel and Gigi Hyland sat on the stage with Matz and several NCUA senior staff members during the meeting and occasionally spoke but mostly listened.

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