A year ago — even six months ago — no one would have predicted the National Credit Union Administration would do what it is doing Thursday: holding a public hearing on the agency's budget.
But nearly six months ago, then-NCUA Chairman Debbie Matz stepped down after leading the agency for almost seven years, and though her gavel was passed to a fellow Democrat, Rick Metsger, changes at the regulator have been swift.
Metsger scheduled a public hearing on the agency's budget for Thursday afternoon, following the board's jam-packed regular monthly meeting that has both the new field of membership rule and supplemental capital on the agenda, among other things.
NCUA began holding budget hearings during Dennis Dollar's term as chairman, from 2001 to 2004. Dollar, who serves now as principal partner at the Dollar and Associates consulting firm in Birmingham, Ala., is gratified the policy is being revived after being discontinued in 2008.
"I believe NCUA is taking the right step, both in the eyes of its stakeholders and Congress, to return to the public budget briefings that we began under my chairmanship in 2001," he wrote Tuesday in an email to Credit Union Journal. "More open government is always better government, and NCUA paid a pretty high price on Capitol Hill with its leadership's stubborn insistence on no public budget briefings for the past six years."
If Matz, who is now serving on the board of the $8 billion Mutual of Omaha Bank in Nebraska, is stung by the implied criticism, she's not saying. Given the opportunity to respond, she pointed to the improved state of the industry while the agency was under her leadership.
"I'm very gratified that at the end of my tenure the credit union system was much stronger and more secure than it was in 2009 and when I stepped down NCUA had the resources to effectively supervise the credit unions it oversees," she told CU Journal in an email.
The upcoming hearing has also garnered strong support from industry trade groups and insiders.
"I think having the public hearing gives the industry members a sense that there is some accountability and responsiveness and at least an opportunity to have some dialogue," Eric Richard, a principal at CU Counsel PLLC in Washington DC and the former general of the Credit Union National Association. "That's why it's so popular."
NCUA has come under fire in recent years for maintaining stubbornly high levels of spending even as other financial regulatory agencies pared back their budgets in the wake of the financial crisis.
NCUA has tentatively pegged 2018 spending at $313 million.
The agency also took heat from industry stakeholders and lawmakers alike for refusing to hold public budget hearings. While none of the other financial regulatory agencies hold budget hearings, they appear to have done a better job of holding spending in check.
According to the FDIC, its spending has declined from just under $3.5 billion in 2010 to approximately $2 billion in 2015.
Costs have remained similarly muted at the Office of Comptroller of the Currency, which reported spending $1.01 billion in 2015, down from $1.08 billion in 2012.
"Credit unions see a contrast with the [Federal Deposit Insurance Corp.], which has been cutting back its budget and staff since the end of the financial drisis, and NCUA, which has been on a pretty steady upward path, at least in terms of budget," said Richard.
National Association of Federal Credit Union President and Chief Executive Officer Dan Berger said in a statement Tuesday that it is time for NCUA officials "to sharpen their pencils" and rethink the budget.
"NAFCU has long-sought greater transparency on the budget process from the NCUA. We welcome the opportunity to review the budget in detail," Berger said.
Jim Nussle, Berger's counterpart at CUNA, also characterized resumption of budget hears as a move toward "much needed transparency."
"Credit unions must have an informed voice in matters that involve spending their money — which is their members' money — on agency goals and priorities," Nussle said Wednesday in a statement.
NCUA watchers have speculated about the agency's change of heart with regard to public budget hearings. The answer, on the surface, is simple: new chairman, new rules. But given that Metsger was vice chair to Debbie Matz' chairman for a portion of the time that the regulator staunchly refused to open up the budget in this fashion, the full answer may not be so simple.
In the end, Richard suggested resuming the hearings provided the path of least resistance for Metsger.
"It looks to me like he sought to eliminate some irritants that had arisen between the agency and the industry that were not really serious enough to justify putting a lot of energy into," Richard said.
