Dear Chairman Matz:

July 24, 2015 at 8:13 am Leave a comment

I just got done watching your congressional testimony about NCUA’s budget operations. Between you and me, you shot yourself in the foot with what Congressman Mick Mulvaney called your “crazy talk” defense of NCUA’s refusal to re-institute budget hearings. Listen, I love people who stick to their guns. In the dictionary there is a picture of me next to “Beater of Dead Horses.” But there is a point at which you have to admit you’re wrong, or at least concede that continuing a fight isn’t worth it and move on. We are well past that point when it comes to a request for a single budget hearing on NCUA’s budget proposals. Declare victory, admit defeat and schedule one today.

First let me explain that I am a fan of the work you have done at NCUA. You’ve implemented substantial mandate relief, restructured the corporate system and have more aggressively pursued compensation for the banker malfeasance than any other agency in Government. You have a good story to tell, so why not just reinstitute a budget hearing and get into telling it?

Do you realize you just told Congressmen, people who appropriate money for a living, that budget hearings are a waste of time? That was bad enough but you also opined that any credit union CEO in favor of them is being manipulated by the Trades and not representing the best interests of their members.

Do you really believe that credit unions aren’t representing the interests of members when it comes to advocating for budget cuts? I was a little surprised by this comment but not quite as surprised as Congressman Mulvaney, who asked you a second round of questions to clarify this “crazy talk.”

You didn’t back down one bit. In fact, you suggested that credit union members should want NCUA to have a larger budget because it helps protect their money. So let me get this straight: the more money NCUA is allowed to spend without any oversight the more efficient it will become? I get it: that must be why so many third world dictatorships with bloated bureaucracies, well-fed dictators and starving populations spend their tax dollars so prudently.

I know you have been around credit union CEOs and members longer than I have, but they strike me as a fairly frugal lot: you don’t go into banking to spend money you go into it to save. Can’t you at least see how it just might bother people as a matter of principle that the agency they fund is consistently raising its budget even as they scrimp and save on theirs? After all, this is an industry where every basis point matters. Can’t you see how spending over a million dollars so that NCUA can have its very own Cone of Silence might raise a few eyebrows? Unlike the Treasury, the NCUA is not exactly a linchpin of the world economy.

Congressman Mulvaney had a good question for you. Since NCUA doesn’t get its funding from Congress, and you don’t want to get industry input on NCUA’s budget, then whom exactly should you be accountable to when spending other people’s money? I would love to determine my salary and have the Association pay the bill, but somehow I don’t think my boss would go for that.

I’ll let you in on a secret if you promise not to tell anyone. If I was to list the 10 biggest issues facing credit unions, NCUA’s budget process would be number 15 on the list. I also think it makes sense to increase spending on financial oversight after the country has a meltdown caused, in part, by a lack of financial oversight. But, this is precisely why you should hold a budget hearing and remove this silly distraction.

Look at what happened today: you came across as slightly arrogant and somewhat indifferent to the concerns of Congressmen, many of whom said they love credit unions. Listen, there is a lot of important stuff to be done. I’m afraid that this budget issue is going to take on a lot more importance than it deserves. Do me a favor and schedule one budget hearing. It might not be all that informative, but it won’t be a waste of time if only because it would demonstrate that you know the people who are taxed to pay NCUA’s bills deserve the opportunity to discuss NCUA’s budget in a public forum.

You repeatedly told Congress that you learn a lot more about credit unions than you would listening to hand-picked lackeys of the Trades drone on about NCUA’s budget for a few hours every year. I know you love to get out and meet people, but small talk over stale cheese and mediocre wine at credit union get-togethers just isn’t the same as a formal on-the-record discussion. My guess is you can find the time to do both.

P.S.

I noticed how you managed to make additional budget cuts at yesterday’s Board meeting hours before your Congressional appearance. I’m sure this is just a coincidence. After all, public oversight really doesn’t lead to better budgets, right?

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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