NCUA Chairman Debbie Matz and Board Member J. Mark McWatters exchanged a heated debate during the agency's Nov. 19 board meeting.
Hotly-contested issues on the table Thursday included the NCUA's two-year budget plan, a field of membership changes proposal – which the incoming American Bankers Association president attacked on Wednesday – and changes to the overhead transfer rate delegation.
During a discussion of the agency's proposed two-year budget plan, Matz explained the need to hold off on moving to an 18-month examination cycle was, in part, due to recently proposed and finalized rules. The combined operating and capital budget, which passed on a two-to-one vote, will be more than $300 million for 2016 and will rise to $316 million for 2017.
McWatters read a lengthy statement outlining his concerns with the budget, calling into question the validity that the NCUA started the budget at zero dollars and built it up from there. He also questioned the efficacy of waiting to implement an 18-month examination cycle until after the RBC rules go into effect in 2019, and added the NCUA should work to reduce its budget and improve transparency for the budget process.
In addition, he said the board has failed to engage both its members and board in a dialog on the budget process.
“The NCUA can and should reduce the operating budget and improve its budget process,” McWatters said during the conclusion of his statement, which lasted nearly half an hour. He called the agency's efforts to fund its operations “misguided.”
NCUA Vice Chairman Rick Metsger later attempted to clarify that the board never actually had a budget hearing, but instead held a budget briefing. He said any attempt to hold a hearing would be akin to micromanaging the budget process.
After McWatters' statement on the budget, Matz said, “There's so much misinformation in that statement, I won't even attempt to refute all of it.”
She said McWatters' claim that the agency is “shutting the door” on an 18-month cycle is erroneous.
“We are looking at an extraordinary amount of reg relief, it's inappropriate and irresponsible to do reg relief and increase our exam cycle,” she added.
The exchange heated up as Matz continued to address some of the concerns McWatters raised.
“It's rather extraordinary to be accused of manipulating our exam hours to influence the OTR,” Matz said. “I have to say I am not totally shocked by that, for questioning the integrity of the agency.”
“I didn't say that,” McWatters said.
“Yes, you did, by inference,” Matz said.
“I did not say that,” McWatters countered.
Matz also addressed McWatters' discussion on dialog with the board, stating that if McWatters is not “getting that, perhaps it's your lack of participation and not the staff's.”
McWatters further criticized the agency, adding the credit union community is “tired of these vague promises.”
“It's interesting that you set yourself up as the spokesman for the credit unions,” Matz interjected.
“I don't recall doing that,” McWatters replied.
Matz later told McWatters that he does not attempt to understand the issues, how the examination process works, or why some of the agency's decisions are made in the interest of safety and soundness.
“Any board member who wants information from the staff, you will get it,” Matz said. “You might not agree with it, but you will get as much information as you want, on any subject that you want. And clearly some of the things said here today, without a doubt, you have no understanding about some of the issues that you are criticizing.”
The board concluded by passing each of the budget agenda items by a two-to-one vote, with McWatters voting nay each time.
Continue Reading for Free
Register and gain access to:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.