ALEXANDRIA, Va.-Gigi Hyland's departure from the NCUA board could raise the specter of gridlock should the remaining two members-one Democrat and one Republican-not agree on issues going before the agency.

Though Democratic NCUA Chairman Debbie Matz and Board Member Michael Fryzel (formerly the agency's chair under the Bush Administration) have largely voted in tandem, the issue of having a one-to-one vote is just one of the possible ramifications of having a two-person board for any period of time.

And that period of time is likely to be somewhat lengthy, as it's unlikely an appointment will be made until after the presidential election, Capitol Hill observers agree.

"Certainly there's a different dynamic with two members on a board that is designed to be made of three members," said Carrie Hunt, VP-regulatory affairs and genera counsel of NAFCU. "The voting history of this board demonstrates that it's been very infrequent that anyone registers a no vote, but we'll have to see whether any sticking points arise."

CUNA SVP/Deputy General Counsel Mary Dunn agreed, and noted some CUs might be hoping for a little gridlock to slow down the tide of regulation. "We have seen two-member boards at NCUA in the past, and with these two particular board members, I wouldn't expect there to be problems," she said. "But theoretically, if a disagreement came up, you could be in a situation where nothing gets done. Credit unions who have been beleaguered by so many regulations might actually celebrate that idea, but if it was an issue of reform or granting credit unions additional authority, obviously that would be a problem."

One former NCUA staffer and long-time credit union industry observer, John McKechnie, said he believes Matz and Fryzel will avoid any sort of partisan clashing, despite the penchant for such in Washington. "The NCUA Board will have two members with very clearly articulated views on regulation and supervision," said McKechnie, who is now a partner at Total Spectrum. "My experience, having worked for both, is that their first instinct is to find common-sense, pragmatic, answers to problems, something that will work in the real world. They will find ways to make this new dynamic work for the agency, and for credit unions."

But there is also the question of the board members meeting all of their obligations when the board is down by one person. For example, Hyland was NCUA's representative to the NeighborWorks America Board of Directors. "The NCUA board is designed to have three active members who have public speaking engagements, visit credit unions and other groups and serve as liaisons to other organizations and agencies," Hunt offered. "Now that work has to be done by two people instead of three."

The other potential issue: what happens if either of the remaining two members leaves the board for any reason? "If anyone else leaves the board before a third member is appointed, that really becomes difficult," Hunt said.

While such a scenario is unlikely-Matz still has approximately three years left on her term, and while Fryzel's term is up in August of 2013, he may well agree to continue serving until an appointment has been made-it has happened before.

NCUA Spokesman John Fairbanks said the board has been down to just one person at least twice.

"There's nothing in the Federal Credit Union Act that says one person couldn't act in the name of the board," Dunn said. "But obviously, that was not the intention when the board was created. I think there would be a reluctance to take on anything additional until an appointment was made."

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