By Ginny Brady
On Aug. 24, NCUA and the credit union industry saw Deborah Matz sworn in as the new chairperson of the NCUA Board. Chaiman Matz is not a stranger to the NCUA, having served on the board from 2002 through 2005.
Credit Unions like UFirst FCU are wondering what we can expect from Chairman Matz in leadership style, regulatory reform and NCUA support for small credit unions. One clue may come from a speech that Matz gave at a National Association of State Credit Union Supervisors meeting in the 2003. She challenged credit unions to increase member growth saying, “Most individual credit unions--including the vast majority of small and mid-sized credit unions--are either shrinking or limping along with growth in the low single digits." CU growth has not changed much in 4 years. According to a March 2009 report on federally insured CUs by NCUA, single-digit member growth has been the trend from March 2006 through March 2009. Credit unions have done better in asset growth but, in spite of the unpopularity of large financial institutions and the positive publicity credit unions have received over the last year, we haven’t done much better in loan growth. In fact, surprisingly, credit union loan growth actually decreased in the first quarter of 2009.
Chairman Matz will be greeted with some good news in the early months of her leadership. In spite of losses sustained mainly because of the corporate credit union collapse, the majority of credit unions are still maintaining strong capital. The NCUA report lists net worth for the first quarter of 2009 as being well above the NCUA required 7 percent. UFirst FCU has been able to sustain capital of over 11 percent and I don’t think we are unusual among small credit unions. This may change if more bad news among corporate CUs spreads and as NCUA replenishes the National Credit Union Share Insurance Fund. This brings me to what I will be looking to NCUA (and Matz) for in the months ahead.
Credit Unions like UFirst will be examining the proposals NCUA generates for the restructuring of corporate credit unions. In particular, smaller credit unions will be monitoring the corporate credit union structure and how it continues to provide for services that are so important to maintaining the competitive stance of mid-sized and small credit unions.
Last April I attended a workshop sponsored by NCUA and designed for credit union volunteers and staff. This workshop was free and provided us with a forum in which we could discuss the concerns resulting from the corporate CU crisis. Local NCUA officials answered challenging questions and provided an element of transparency to the role NCUA is playing in maintaining credit union viability. Increased use in 2008/2009 of the Webinar as a means of education and communication has been of great value; I look to NCUA to expand these tools for the benefit of board members and staff.
Regulators have played an important but non-public role in the day-to-day operation of credit unions. Most members were not aware of the protection afforded them by the NCUSIF. This reassurance has been emphasized and publicized by NCUA in ads featuring Jane Bryant Quinn. I would hope that Chairman Matz would spearhead more ways for NCUA to increase the national visibility and safety of credit unions.
By her own admission, Mrs. Matz had little experience beyond credit union membership when she joined the NCUA board in 2002. She now comes to the chairmanship of the NCUA Board as a three-year veteran. She has also been part of the management team of Andrews Federal Credit Union, giving her an inside view of credit union challenges and operations. All CU advocates are hopeful that she will help to guide and strengthen credit unions through what former Chairman Michael Fryzel has noted is "...the most difficult period of the first century of the credit union movement."
Ginny Brady has been a credit union member for over 15 years and has served as a member of the UFirst Federal Credit Union Board of Directors since 1997. She has held the position of board president and is currently the vice president of the board. Ginny, a CUES Director member, was awarded the 2008 Volunteer of the Year Award by the Credit Union Association of New York. She has also completed the CUNA Volunteer Leadership Program and received the Blue Diamond Certificate. She has developed a board of directors blog, The Boardcast.
