MONTREAL — Perhaps the most interesting thing about NCUA Chairman Debbie Matz' speech at NAFCU's annual meeting here was in the very rare moment when she went off script.
"I encourage all of you to participate in my 12th webinar for the credit union system on July 28," Matz told the crowd, still on script. "This webinar is another opportunity for us to discuss regulations, examinations, and yes, even the NCUA budget... maybe... depending on what you ask."
While mentioning the budget — long a matter of controversy for its lack of transparency — was part of the script, it was that pregnant pause followed by the quip, "maybe... depending on what you ask," that wasn't written into the speech that not only drew laughs but also points to the tension on this topic.
It seems like such a little thing, but it speaks volumes to just how touchy a subject this has become. Credit unions have long sought more information from the agency on the promulgation of its budget.
Most recently, a couple of pieces of legislation have been introduced that would force NCUA's hand. One would implement a Government Accountability Office study of the regulators' budget and how it handles the various funds in its control. Another calls for holding annual public hearings on NCUA's budget.
In another off-the-cuff moment, Matz started her speech by quipping, "I'm just wondering: What did you guys do last year in Vegas that forced NAFCU to hold this year's meeting outside the United States?"
Though the other 99.9% of Matz' speech stuck to the script — as she is wont to do — it was a script that was aimed to please its audience. As she has been doing all year, the chairman spoke of 2015 as the "Year of Regulatory Relief," outlining the six areas in which NCUA is focused on easing credit unions' compliance burden:
- Implementing a supplemental rule for risk-based capital. Matz pointed out that this move would increase access to secondary capital for low-income credit unions, adding that 47% of credit unions have the LICU designation.
- Field of membership. NCUA has already proposed a rule change that designates 12 categories of associations that can be added to a CU's FOM without agency approval, and the agency expects to have still more changes to its FOM rules out by the end of this year.
- Elimination of the 5% fixed assets cap. "We all know that an over-concentration in fixed assets is dangerous. But when you run a business, there are certain expenses you can't avoid. Maybe you need new computers, renovations to improve your facilities or video tellers," she said. "You should be able to run your business without needless red tape."
- Asset securitization. "We intend to allow larger, qualified credit unions to securitize their assets. Remember, to be able to successfully conduct securitization, scale matters," Matz said. "Our final rule would permit the largest credit unions to tap new sources of liquidity and reduce interest rate risk by converting fixed-rate assets into cash."
- Member business lending. The agency just recently issued its proposal that would, among other things, remove the requirement of a personal guarantee for every MBL. Matz noted that once implemented, it will take some time to get NCUA's examiners retrained.
- Definition change. Raise the definition of "small credit union" from $50 million to $100 million in assets.