By Michael Fryzel
It has often been said that the greatest impact individuals can have on government is when they have easy access to the elected and appointed officials who govern and control what is of greatest interest to them.
For the credit union community, that easy access has been to the board of the National Credit Union Administration (NCUA). When at full strength, the NCUA board has three members. The national credit union trade associations, the individual state leagues, the organizations that represent the defense credit unions and state credit union supervisors, and even individual credit unions can easily contact the members of the board and speak to them about an issue they believe is important.
One issue of great importance to all credit unions is the annual NCUA budget. Since the operation of the agency is funded by credit unions, it is only right and fair that credit unions know what is being spent and what it is being spent on.
For years NCUA held a public hearing on their proposed budget. Attendees had the opportunity to listen to a full budget presentation and raise questions about specific areas of expenditures. From 2009-15, there were no hearings because the chairman at that time refused to hold them. That action infuriated credit unions. Asking CUs to provide the money to operate but not having the ability to comment on how it is spent was wrong.
In 2016 that changed. A hearing was held, testimony was given, and all indications are that it will again be an annual occurrence.
The recently introduced Financial CHOICE Act of 2017 (CHOICE) contains numerous changes to the Dodd-Frank Act that will be good for the economy and the financial services industry. Chairman Henserling of the House Financial Services Committee is committed to pass legislation that will improve the financial environment and the business climate. It is anticipated that after numerous hearings and agreed amendments CHOICE will provide better and fairer regulation.
One Provision Worth Changing
There is, however, one provision in CHOICE that both NCUA and the entire credit union industry should work together to change. That provision is the one giving Congress authority to appropriate the NCUA budget.
Taking the budget process out of the hands of the NCUA board is a mistake. As an independent federal agency NCUA is unique in having the ability to prepare a budget, put it out for public comment, access the suggestions made by the industry, make any changes they deem acceptable and approve a budget that has been thoroughly reviewed and vetted. This process gives a greater voice to the credit union industry to address their concerns directly with the board members to which they have access.
If credit unions believe that Congress will do a better job in handling what credit unions get and spend, they are mistaken.
Influence and change is achieved through access. That access is with the three members of the NCUA board not the 535 members of Congress.
The entire credit union industry must work together to keep the budget process for NCUA in NCUA. They must not give up the influence they have through the access they enjoy. The ability to make a difference will be lost if NCUA becomes a part of the massive federal budget.
Michael Fryzel is the former chairman of NCUA and NCUA board member who is now in private practice in Chicago. Mr. Fryzel can be reached at meflaw@aol.com.