What Kind of Chairman Will Ms. Matz Be?

The Senate today confirmed Deborah Matz as NCUA Chairman.

Reviewing her written remarks before the Senate Banking Committee on July 22 provides some insight into how she might steer the agency.

Beyond safety and soundness, Ms. Matz stated that she would encourage “credit unions to reach out to serve all eligible members.” She pointed out that a major accomplishment from her previous tenure on the NCUA Board was getting credit unions “to reach out to those in their field of membership who may fall prey to unscrupulous lenders.” She also noted that she helped to create the Office of Small Credit Union Initiatives, which provides technical and financial support to small credit unions which serve low income populations. Therefore, a push to serve underserved and low income communities will likely be a priority of her administration.

But also, serving all eligible members is code for expanded business lending by credit unions. In a 2002 speech to Pennsylvania Credit Union League, she said “member business lending may be an opportunity to expand services and income while meeting the needs of members.” So, I would suspect that she will look at avenues to greatly increase the ability of credit unions to serve business customers.

As for the biggest problem confronting the credit union industry – the restructuring of the corporate credit union system, Ms. Matz will limit the investment authority of corporate credit unions, which she believes is too broad and permissive. She also will champion reducing concentration risk in corporate credit unions; but we don’t know where she stands on requiring stronger capital standards for corporate credit unions.

A final point, Ms. Matz had served as an officer of a large suburban Washington, D.C. credit union until June of last year. This experience will undoubtedly influence her decisions. Hopefully, it won’t compromise her independence.