Let Board Members Talk To Each Other
Here Is A Radical Proposal: Let NCUA Board Members Talk To Each Other Without Violating Federal Law.
I’m not joking. With one very narrow exception, anytime two members of NCUA‘s three member board talk policy they are conducting a meeting that must be open to the public. Otherwise they are violating federal law. As credit unions get more sophisticated and the environment in which they operate becomes more complex, this is more than one of those charming little antiquated quirks unique to credit union land. It is an unnecessary barrier to optimum policymaking and supervision.
The negative consequences of this communications straight jacket were on full display at NCUA’s most recent board meeting. MBL reform is a big deal with important consequences for the industry. The changes were finalized at this meeting, but not before board member McWatters urged the Board to consider additional changes. Board members Metsger and Matz criticized him for not suggesting these amendments to staff until the prior evening and not giving them a heads-up about his proposal prior to the meeting. McWatters pointed out that he wasn’t legally allowed to talk to them about these changes before the meeting. They pointed out that their respective staff persons could have. Everyone had a valid point; but, it was a scene worthy of the principal’s office, not a regulatory meeting.
Besides demonstrating yet again that McWatters can’t leave the Board soon enough for Matz and Metsger, the exchange underscores why the existing law makes no sense for a three member board.
First, it inhibits the type of informal give-and-take between members that leads to solutions and builds cordiality. How are these people supposed to get along with each other if they can’t even speak to each other?
Secondly, the law doesn’t foster more openness. Instead, it forces board members to play a game of Operator where messages have to be transmitted between staff members. My six-year-old loves playing the game at the dinner table, especially when we have lots of company. By the time her message gets around the table, something inevitably has gotten mangled in translation even when the wine has not been flowing. Is this really a good way to make policy?
One solution would be to modify federal law so that two members of the board could talk without violating the law. A second, better solution would be to expand the number of NCUA board members to five. Not only could board members speak more freely to each other, you also would get a larger variety of views. For example, the National Association of Credit Union Supervisors has suggested that one board member should be a representative of federally insured state chartered credit unions.