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Matz receives quick and friendly treatment at confirmation hearing.

WASHINGTON--In a 23-minute hearing that was part love fest and part survey of the challenges facing the credit union movement, Deborah Matz, NCUA chair-nominee, promised lawmakers she'd take a balanced approach to regulating credit unions.

She told members of the Senate Banking Committee last Wednesday that she would work to ensure that the agency's rules contain "appropriate safeguards and sufficient opportunities for credit unions to thrive." But she added that the agency's upcoming revision to its corporate credit union regulations would be tougher than the last rules enacted in 2002, which she voted against during her previous tenure on the board.


Matz said those rules were problematic because "the investment authority being granted was overly broad and permissive, particularly in light of the complexity of the financial instruments that were available to the corporates."

She addressed the issue of the corporates both in her opening statement and in response to a question from Sen. Richard Shelby (R-Ala.), the panel's senior Republican, who talked about the need to restructure the corporate credit union system without concentrating so much risk.

The questioning from Shelby and Acting Chairman Tim Johnson (D-S.D.), the only two senators at the hearing, was nonconfrontational. Both men praised Matz-Johnson called her "very qualified" and Shelby called her "highly qualified. Johnson also read from a 2005 Credit Union Times editorial lauding her accomplishments while on the NCUA Board from 2002-2005.

Johnson called the New York City native an "honorary South Dakotan," because of her professional and personal ties to the state, stemming in part from her friendship with former Senate Majority Leader Tom Daschle (D-S.D.).

Matz also has ties to the state because her husband, lawyer-lobbyist Marshall Matz, works on behalf of Native American tribes and was a public interest lawyer in the state during the 1970s. He contributed $500 to Johnson's re-election campaign last year.

Marshall Matz sat behind his wife at the hearing, as did their daughter, Hayley.


In attempting to appeal to both Johnson and Shelby, who have different views on regulatory issues, Matz took a nuanced view of the Obama administration's proposal to create a new agency to regulate consumer financial products.

When responding to a question from Johnson, she endorsed the Obama administration's proposal for a new agency and said it is needed to centralize and streamline regulation. She added that the NCUA does a "great job" regulating financial products that credit unions sell to consumers.

But in response to a question from Shelby, who noted that credit unions are already designed to serve the needs of their members, she said she "would not object" if credit unions are exempt from the purview of the agency. She added that if credit unions are regulated by the new agency, which the Obama administration is proposing be called the Consumer Financial Protection Agency, they should have a representative on its board.

Matz also promised that if she is returned to the NCUA Board, she would have the agency do even more to help credit unions promote financial education and reach out to as many consumers as possible.

Johnson asked her what the NCUA can do to give low-income consumers access to short-term credit without getting them trapped in a cycle of debt.


Matz replied that when she was on the NCUA Board, she initiated Partnering and Leadership Success, which taught credit unions how to provide alternatives to payday lending, and when she was the chief operating officer at Andrews Federal Credit Union, it instituted a "Cash to Go" program to provide low-interest loans.

She said she will stress to credit unions that these kinds of program must be done carefully and may take a while to make a profit.

Matz was nominated by President Obama in May to be the NCUA Chair. If confirmed, she would succeed NCUA Chairman Michael E. Fryzel, who will remain on the board as a member. She would take the board seat currently held by NCUA Vice Chairman Rodney Hood, whose term expired in April but has stayed on the board pending the arrival of a successor.

In addition to her work at Andrews FCU and on the NCUA Board, Matz was a senior executive at the U.S. Department of Agriculture and a staff economist for Congress' Joint Economic Committee.

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Author:Marx, Claude R.
Publication:Credit Union Times
Date:Jul 29, 2009
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