Maybe NCUA Chairman Debbie Matz is thinking of joining the circus.

During her recent speech on the agency's regulatory agenda, Matz tried to do the rhetorical equivalent of a high-wire act.

As befits an appointee of a Democratic administration, during her speech at NAFCU's Congressional Caucus she spoke at great length of the agency's responsibilities for ensuring the safety and soundness of the credit union system. She emphasized the need for stronger regulations of CUSOs and interest rate risk.

However, given the challenging economic climate and President Obama's uphill struggle to win a second term, the chairman also talked about instances in which the agency will offer regulatory relief so credit unions can do more to serve the needs of their members. She noted that the agency was expanding some of the exemptions to regulations that previously only applied to CAMEL 1 and 2 credit unions (under the RegFlex program) to all credit unions.

The CUSO and interest rate risk rules are part of what credit union leaders and their trade associations gripe about when they express concern about what they see as an excessive regulatory burden. CUNA and NAFCU repeatedly contend that credit unions are the most regulated of all financial institutions.

To be sure, finding a trade association that doesn't think its industry is overregulated is as likely as finding a 5-year-old who thinks his or her parents lets them eat enough candy.

Quantifying the claim that credit unions bear the heaviest regulatory burden is hard to do. It's almost as challenging as trying to settle argument whether Derek Jeter or Cal Ripken is a better shortstop.

Matz (who as Yankee fan would certainly come down on the side of Jeter) understands the value of nuance and balance when writing rules. 

In her last stint on the NCUA board, she voted against a series of corporate credit union regulations because they weren't strong enough. However, she often notes that when she was the chief operation officer at Andrews FCU, she was frustrated by some of the regulations that the credit union had to comply with. 

Matz isn't the first NCUA head to talk about wanting to take a balanced approach to rulemaking and enforcement.

In his first speech during the one year he spent as NCUA chairman, Michael Fryzel said he favored a level of regulation that was “as minimal as possible, as much as necessary.”

Fryzel was an appointee of President George W. Bush and took office in August 2008, just as the severity of the financial crisis was becoming apparent. His approach to regulation was acceptable enough to the Obama administration that he remained as chairman for the first eight months that Obama was in office.

During his chairmanship, the agency flexed its muscle. First, by pumping money into WesCorp and U.S. Central and subsequently conserving the two troubled corporate credit unions.

Both Presidents Bush were what some might call “big government conservatives” and weren't afraid to expand the reach of government.

The first President Bush signed the Americans with Disabilities Act into law. This measure, which was passed by a Democratic Congress, added to the requirements that businesses had to comply with in order to make their facilities more accessible to persons with physical challenges.

By contrast, while Democrats are often more supportive of heavy regulation, there have been some notable exceptions to that pattern.

President Clinton pushed for, and Congress passed, legislation that for the first time since the 1930s allowed bank holding companies to own other financial firms. That measure was enacted during a time of economic prosperity, and there are some who argue that the banks used their new powers to take excessive risk that helped trigger the recent economic meltdown.

Obama, who in some ways marketed himself as an anti-Clinton when he sought his party's nomination in 2008, is realizing that a little deregulation may not be so bad. 

He has been urging both executive departments and independent agencies to find ways to get rid of unnecessary rules that hamper job growth and innovation. This effort will probably continue at least until next year's election.

That's why you don't have to buy tickets to Ringling Brothers to see dramatic demonstrations of balancing acts. Just look at a copy of the Federal Register. 

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