NCUA Hiring Practices Probed By Oversight Subcommittee

Coming under more congressional scrutiny Tuesday, House Banking's oversight subcommittee investigated charges of hiring abuses at the National Credit Union Administration.

"There is little doubt that this episode, building on others, has now created a true credibility crisis for this agency," subcommittee Chairman Spencer Bachus said. "For senior and mid-level management of a federal financial regulator to have been involved in such wide-ranging prohibited personnel practices and to have taken steps to cover up such conduct clearly undermines the trust of the credit union industry in its regulator."

The Republican from Alabama has previously criticized NCUA Chairman Norman D'Amours' management of the agency, specifically accusing him of withholding information from other board members.

On Aug. 8 the Office of Personnel Management, after identifying numerous hiring violations, revoked the NCUA's power to hire employees. The action did not become public until last week-and only after the agency's two board members forced Mr. D'Amours to release OPM's report.

Describing the NCUA's violations for the subcommittee, Acting OPM Director Janice R. Lachance said, "the basic concept of fair and open competition was severely compromised."

Advertisements for jobs were placed in remote areas so that "pre- selected" candidates could be hired, she said. The NCUA also harmed agency veterans, she said, by circumventing policies designed to make the hiring process competitive.

The NCUA countered that the move was necessary to create a more diverse work force, but Ms. Lachance said only five of 45 examiners hired in this manner belonged to minority groups.

NCUA Board Member Yolanda Townsend Wheat testified Tuesday that 12% of the agency's examiner work force may have to be fired. If that happens, she said, the NCUA will have a tough time supervising credit unions on schedule.

In his written testimony, Mr. D'Amours did not directly respond to criticism. He did say that the agency is fully cooperating with OPM. "There appears to be evidence that these practices existed at NCUA for many years," he said. "The board will see to it that they end now."

Rep. Bachus said he may hold another hearing Oct. 7 to hear from mid- level NCUA managers.

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