Matz Departs NCUA Hoping To Have Made A Difference

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Three and a half-years after joining a federal agency she admits she knew little about, Debbie Matz has exited the NCUA board hoping to have made a difference during her term.

Matz resigned her NCUA board seat Sept. 30, even though no replacement has been named or confirmed by Congress, leaving Chairman JoAnn Johnson as the lone NCUA board member. Her departure capped more than two decades of public service and she left uncertain of where she might land next, other than to say it won't be in government service. Matz did not rule out that she might return in some function related to credit unions, and ethics rules have prohibited her from even discussing such a future while at NCUA.

Matz' term was largely uneventful, but following as it did that of the board of Norm D'Amours and Yolanda Wheat, it would have been difficult to upstage that act, and credit unions have been largely grateful to avoid a repeat. NCUA board members typically champion a particular cause or issue, and Matz focused much of her attention on credit union membership growth rates, including during her last remarks before CUs at NAFCU's Congressional Caucus.

"I think it's been a wonderful time. I am so excited during the last week here as I was during my first week here," Matz said just prior to departing. "There have been great people to work with both in the credit union movement and at the agency."

Matz came to NCUA in early 2002 as the democratic appointee following a recommendation from then South Dakota Sen. Tom Daschle. Matz acknowledges that other than being a member of two or three credit unions during her life, she knew little of NCUA prior to going to Alexandria. But Matz was by no means new to Washington. She had been appointed by President Bill Clinton to serve in the U.S. Department of Agriculture from 1993-2001, where she oversaw the administrative arm of the 100,000-employee agency, and had also been an Executive Officer at the North American office of the UN's Food and Agriculture Organization. Prior to that she had served for nine years as an economist with the Congressional Joint Economic Committee.

Once her nomination surfaced for the NCUA board, Matz said, "I was given more briefing books than anyone could read in a lifetime. The trade associations were very generous with their time and helpful with information."

Matz recalled being surprised early on at the sophistication of CUs, and the fact that the federal regulator "really understands the differences in credit unions and respects the fact that a credit union is not a credit union." Still, during the past three years the number of credit unions has steadily decreased, sinking to levels not seen since before World War II, and many of those that have disappeared have been small credit unions that have been absorbed via merger.

PALS Workshops Championed

For those credit unions seeking to prosper and not merge, Matz pioneered a successful series of Partnering And Leadership Successes (PALS) conferences across the country that focused on just that issue, membership growth, especially at smaller credit unions. Those meetings generated an enormous amount of content, which is still available on the NCUA website at www.ncua.gov.

"My sense is that size doesn't matter," Matz responds when asked about the fate of small CUs. "The large credit unions are doing what a credit union should be doing. This is the 21st century and there are going to be large credit unions and large financial institutions. But my sense of small credit unions is that I hope they make it, but it's going to be a struggle. I can't speculate how many will or won't make it. I do know that many large credit unions have started to partner with smaller credit unions, which helps."

Matz said she was inspired to launch the PALS initiative by former NCUA Chairman Dennis Dollar's Access Across America workshops, which focused on expanding fields of membership in the wake of new powers to do so. "To me the next step was to move from expanding to make as many people eligible as possible and now turn those people into members," Matz said.

Matz, along with Executive Assistant Steve Bosack, developed the meeting content, along with the hosts of each of the PALS conferences. "We went and pounded the pavement to get people to talk on those topics," she said. "All of the meetings had a unique flavor. Everyone who left the meetings was very excited. I was excited after every one."

Meeting Senator's Challenge

One particular PALS highlight was an appearance by New York Sen. Hillary Clinton at an event at Rochester. Clinton had challenged credit unions to have something big to announce at the workshop, and the region's CUs, led by Summit FCU CEO Mike Vadala, responded with an affordable housing initiative that has now surpassed $100 million. So what will become of PALS when Matz leaves?

"I don't know. It's up to the next board member," Matz answered. "I'm hopeful they will [continue the PALS program]. I'm hoping the information will stay on the website. I just talked to a group of credit unions in Texas who told me they use the site all the time."

Matz is term also coincided with emerging controversies over credit unions converting to or seeking to convert to mutual savings bank charters. The agency turned back a conversion attempt by Washington-based Columbia Credit Union over voting irregularities, but lost a court fight over its awkward handling of conversion attempts by Texas-based Community Credit Union and OmniAmerican Credit Union.

"I think credit union members have a right to stay a credit union member or not," said Matz. "But before a conversion those members have a right to be fully informed. If the board decides to convert and then the board is the only one providing the information, then I think the information is less than complete. But I also don't think the floodgates are open on conversions. There have been 28, counting Community Credit Union and Omni, and that's not a large number, and I don't think that's going to change much. I do think there is much more awareness of the issue. I'm guessing, but at some point I think NCUA may have to go back and change what's meant by clear and conspicuous (disclosure language)."

Prior to speaking to NAFCU's Congressional Caucus, Matz met backstage with the leading congressional critic of NCUA on conversions, North Carolina Rep. Patrick McHenry, who has introduced legislation that would strip NCUA of some of its powers related to conversion. Matz said her own lobbying of McHenry was not very effective. "What is unfortunate is that he has seen NCUA in this little snapshot, and he does not understand that NCUA is not an intrusive or meddlesome agency," she said. "I can tell you he feels very strongly on the issue, and I sense that he's very rigid about it."

During her term Matz said she has seen a change in how credit unions view NCUA, crediting Dollar with soothing some of the "raw nerves" left over from the previous board. She believes that she and Chairman Johnson, who is a Republican appointee, have shown they could work in a "bipartisan way to get things done."

Is a two-member board just as effective as a three-member board? "Well, the two-member board has given me a lot of authority," laughed Matz, who would be in the minority as the Democrat if the third seat were filled. "From my perspective it has worked great. I'm not sure JoAnn Johnson would agree."

About The Tax Exemption

As for the issue nearest to credit unions' hearts, Matz said she doesn't see any threat to the credit union tax exemption-for now. "I think it's safe in the near future," Matz observed. "What has surprised me is just how relentless the bankers are on this issue. I thought initially that (credit union fear of the issue) was exaggerated, but the bankers are on the Hill and in the state houses lobbying all the time on this issue. And credit unions are going to have to do the same. Even if someone was with you six months ago doesn't mean he is with you now."

As for six months from now, Matz said she isn't sure what she'll be doing. "It's been 26 years in public service and I'm ready to do something new," she said. "I also wanted to leave now because the ethics laws are so restrictive you can't even talk to anyone in the field you regulate. It's gone by fast. It's been a great and wonderful experience, and I'm so glad to have had this experience at the end of my career in government service. I hope I was able to make a difference."

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