WASHINGTON — During his Thursday confirmation hearing before theSenate Banking Committee, NCUA Board nominee Richard Metsger dodged what might have been his mostcontroversial question: is raising the member business lending capa good idea?

The former Oregon state senator responded to the question fromRhode Island Democratic Sen. Jack Reed by saying, “I think it's agood idea to recognize the purview of Congress to make suchdecisions.

Metsger was nominated to fill the NCUA Board position vacated byGigi Hyland, who exited the board in October 2012 after servingbeyond her term's expiration. Following the confirmation hearing,Metsger must receive a majority vote by the full Senate before heis sworn in.

Senator Elizabeth Warren (D-Mass.), who in her first six monthsin the Senate, has already developed a reputation for askingdifficult questions during committee hearings, lobbed an easyone to Metsger when she asked if he still owned his '57 Chevy.

In his opening statements, Metsger said he bought the car withhis first loan, which he obtained at age 19 from Portland TeachersCredit Union, where he served as a board member 20 year later. Hedid not, Metsger replied, but had he kept it, it would have been agood long-term financial decision because it would be worth so muchmore today.

Senate Banking Committee Chairman Tim Johnson (D-S.D.), however,did get a meaty answer from the nominee. He asked Metsger whatadditional steps the NCUA should take to implement lessons learnedfrom the financial crisis.

Metsger said that one of the key lessons is that regulatorsshould be watchful in good times and bad. Additionally, he said theNCUA's regulations need to be modernized to look for threats in themodern marketplace. Interest rate risk topped his list ofthreats.

“Credit unions are very involved in the mortgage industry,” hesaid. “We all know what happens in low rate environments, and youdon't know when, where or how much rates will rise. Look at thelast 30 days of mortgage rates or the 10-year Treasury bill.”

Metsger added that if confirmed, he would make sure creditunions are prepared for rising rates. He also discussed creditunion access to emergency liquidity.

“Because of the crisis that hit, in the last five years, theCentral Liquidity Facility is not subscribed to now by a lot ofcredit unions,” he said. “All credit unions must have a plan toaccess emergency liquidity.”

Metsger further said the NCUA must be as contemporary aspossible to meet the risks cybersecurity poses to credit unions,which he described as a systemic risk.

Those three questions were the only ones directed at Metsgerduring the hearing, which featured four other nominees: Rep. MelWatt (D-N.C.) to serve as Director of the Federal Housing FinanceAgency; Jason Furman, nominated to be a member and chairman of theCouncil of Economic Advisers; and Kara M. Stein and MichaelPiwowar, both nominated to be members of the Securities &Exchange Commission.