Recently, there has been conversation about a petition put forth by an individual seeking to secure a seat on the NCUA Board. The campaign to secure a position is based on the premise that a candidate for the office should be required to take a litmus test to confirm that they understand the cooperative principles on which credit unions are founded and operate and that they are committed to formulate regulations and exam requirements based on those principles. 

I believe it goes without saying that any person involved in the credit union industry, be they a regulator, credit union official, trade association representative and even a vendor, needs to understand what credit unions are about, who they serve and the purpose for which they are founded. 

With that in mind, the regulator and insurer of credit unions must take the extra steps when it comes to regulation and examination in order to properly do its job and uphold all provisions of the Federal Credit Union Act. 

Perhaps the most important fact to remember is that credit unions are financial depository institutions. They accept the deposits of members and promise to invest those monies and keep them safe. 

When you hold yourself out as an entity dedicated to help people save and borrow money, you are held to the highest standard of the law. As a result of that commitment to service, rather than profit, you agree to follow the laws and rules governing such institutions of trust. 

Hence, the role and knowledge of an NCUA Board member goes beyond the understanding of the philosophy and commitment of credit unions. It also includes a commitment to the basic principles of financial regulation, that is safety and soundness. 

Making sure that depository institutions operate in a safe and sound manner is the preeminent responsibility of the regulator. Putting in place the regulations to further that objective, while keeping in focus what credit unions need in order to operate for the benefit of their members, is the balance a regulator strives for and works to achieve. 

Individuals who strive for elected offices often times appeal to voters by using a catchy word, gimmick or theme. They try not to discuss issues of controversy or say what they would do if a hard, unpopular decision must be made. Petition promoters tend to do the same. 

The appointment of federal financial regulators is by law given to the president of the United States, by and with the advice and consent of the Senate. And that is how it should remain. In doing so, our chief executives take a broad view and look not only at commitment but also the ability to do what is right and not what is just popular. 

As Julia Child might have once said, “the proof is in the pudding.”

Michael E. Fryzel
Board Member
NCUA
Alexandria, Va.