WASHINGTON—Testifying before the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit today, NCUA Chairman Debbie Matz said the agency “leads” financial institution regulators in budget transparency.
Matz testified in the congressional hearing on NCUA’s budget. It was the first hearing in approximately six years since Congress held a hearing related to the NCUA budget, and four years since an NCUA chairman has testified.
Addressing Committee Chairman Randy Neugebauer (R-TX) and Ranking Member Lacy Clay (D-MO), Matz opened her remarks by emphasizing the state of the CU movement when she took the chairman’s role in 2009.
“In the wake of the Great Recession, the credit union system was on the brink of collapse. To prevent this, we developed an unprecedented mechanism to securitize $50-billion in toxic corporate credit union assets,” Matz said.
She explained that within a few months of her new role, 351 consumer credit unions—holding nearly $52 billion in assets—were close to failing.
“Compounding this situation, NCUA’s budget and staffing in the years leading to the crisis had not kept pace with credit unions’ growth and increasing complexity,” she said in her prepared remarks. “In fact, during the seven years leading up to the financial crisis, NCUA cut a total of 91 staff positions—even though credit union assets had increased by 73%. During this same period, NCUA’s budget as a percentage of credit union assets declined by 35%. NCUA was under-staffed and under-resourced. We’ve since rectified these problems, while preventing any unnecessary budget and staffing growth.”
'NCUA Leads...in Budget Transparency'
Matz then testified that, “NCUA leads financial institution regulators in budget transparency. Our website contains a dedicated budget resource center that includes annual fund audits, budget summaries and slides, office-by-office spending plans, and a host of other budget information, exceeding what other financial regulators disclose.”
Citing NCUA’s Listening Sessions and Town Hall Meetings over the past five years, Matz said the agency has addressed many key credit union issues, including member business lending, the cap on fixed assets, the low-income credit union designation, fields of membership, and burdens on small credit unions.
“So I’m here to tell you: We listened; and we acted,” said Matz, who was testifying just hours after leading an NCUA board meeting at which the budget was also the subject of a vote. “We’ve relieved unnecessary burdens as we’ve modernized our regulations. The NCUA Board remains committed to providing regulatory relief that does not compromise safety and soundness”
Matz closed stating that, “Today, key credit union system metrics have recovered to pre-crisis levels. And notably, the percentage of assets in troubled credit unions has been reduced to a manageable level, down to just 1%.”
For Matz’s printed testimony, click here.