Federation CEO Meets with NCUA Chairman Fryzel - National Federation of Community Development Credit Unions

NCUA Chairman Michael Fryzel (left) meets with Federation President/CEO Cliff Rosenthal at NCUA headquarters in Alexandria, VA. (Photo courtesy of NCUA)

(September 12, 2008 – Alexandria, VA) On August 26, Clifford N. Rosenthal, President and CEO of the National Federation of Community Development Credit Unions (Federation), met with Michael E. Fryzel, the recently appointed Chairman of the National Credit Union Administration (NCUA) at the agency’s headquarters to discuss key concerns to low-income and small credit unions.

“I was impressed with Chairman Fryzel’s familiarity and interest in a number of our key issues,” Rosenthal said. Among the Federation’s priorities discussed at the meeting were:

Chartering and start-up of new credit unions. “We have been distressed by the inordinate difficulty and length of time required to incubate new credit unions,” Rosenthal explained. “The typical time is three years, and the number of new charters on average has been less than ten a year. That’s not especially healthy for a credit union movement that is experiencing increased consolidation.”

The Federation’s recommendations include:

♦ Making new credit union chartering a higher priority for the agency;

♦ Centralizing the review process in NCUA’s main office, with a designated specialist assigned to supervise chartering, in order to ensure more efficient, higher-quality, and consistent review; and

♦ Exploring new and existing means to facilitate the capitalization of start-up credit unions

Credit union partnerships. The Federation has emphasized the need for larger credit unions to assist both start-ups and existing small CDCUs with capital and technical resources.

Chairman Fryzel agreed that enlisting large credit unions was a promising strategy, and encouraged the Federation to identify areas where there were credit unions that could be helped.

Examiner supervision of low-income credit unions. Although NCUA issued a letter in 2005 aimed at acquainting examiners with the special conditions, characteristics, and market of low-income credit unions, the Federation has found that training in the NCUA’s document has fallen short, with many examiners being unfamiliar with the guidance. NCUA has apparently undertaken a review and updating of the earlier document, Rosenthal said, but failed to inform the Federation of its process or goals, despite the fact that the 2005 document was prepared under Chairman Johnson’s leadership in close consultation with the Federation.

“Our biggest concern, simply put, continues to be aligning the agency’s high-level policy with field-level practice,” Rosenthal said. “The Federation will continue to make every effort to ensure that Chairman Fryzel is aware of the disconnect that often occurs in implementing regulatory supervision, and encourage him to improve the agency’s consistency. We will welcome his efforts and look forward to working with him and the rest of NCUA’s Board of Directors.”