WASHINGTON – Chicago lawyer Michael Fryzel, nominated to be the next NCUA Chairman, breezed through yesterday’s hearing before the Senate Banking Committee, but the Republican appointment appears problematic as the Democrats in control of the Senate may choose to hold up non-essential presidential appointments as the Bush administration moves toward an end.
Fryzel, who holds one of the longest resumes of any NCUA nominee, is almost certain to be endorsed by the Banking Committee, but he could be hoist on presidential politics if the Democrats, as they have promised, refuse to bring any nominations to a vote by the full Senate if the term extends beyond the December end of the Bush administration.
In fact, Banking Committee Chairman Christopher Dodd separated the 10 nominees being reviewed yesterday into two panels, one for those whose term would expire at the end of the Bush administration, and the other for nominations, such as Fryzel’s, that will carry beyond. Fryzel would serve almost five years remaining on the current six-year term for the NCUA Board being held by Republican JoAnn Johnson.
Still, some long-time observers of the process suggested the Democratic leaders in the Senate could engage in some old-fashioned horse trading, by allowing votes on some long-term Republican nominations, including Fryzel, in exchange for support for long-term Democratic nominations, such as the two Democrats reviewed yesterday for seats on the Securities and Exchange Commission.
In that case, a new president, if he is a Democrat, still could push the Republican Fryzel aside and nominate another Democrat for NCUA Chairman next April, when Republican Rodney Hood’s NCUA Board term expires. That would give Democrats a two-to-one majority on the three-person panel (Gigi Hyland is a Democrat).
Fryzel, who was the last of 10 nominees reviewed, told the handful of senators at yesterday’s hearing his main focus would be two-fold, if confirmed: the safety and soundness of credit unions and consumer protection.
The former credit union regulator and long-time credit union attorney also stressed his independence. “We will work cooperatively with the industry but will not hesitate to exercise regulatory authority when necessary,” he said.
Fryzel has a long history with credit unions. He worked at the Illinois Department of Financial Institutions as a protégé of former NCUA Chairman Ed Callahan, before Callahan went to NCUA. Then, he was director of the state regulatory agency for eight years. Since, he has worked with private deposit insurer ASI and served on the state’s CU Advisory Board, and he has represented hundreds of credit unions through his legal practice.
The reason Fryzel is able to skirt the limit of one NCUA Board member with credit union ties (Hyland worked for the Association of Corporate CUs and Empire State Corporate FCU), is because he has not worked directly for a credit union.
