New NCUA Hiring Poses A Familiar Quandary

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NCUA Chairman Dennis Dollar has done the agency a real service with the hiring of CUNA's House lobbyist John McKechnie. McKechnie is well-known and respected on both Capitol Hill and throughout the credit union movement. The long-time CUNA lobbyist is one of the best- known Washington figures in the movement, having visited credit unions in just about every state during their league's chapter or annual meetings.

But the McKechnie hiring may pose a problem of a different kind to the new NCUA chairman and his fellow board members. That's because as a so-called Schedule C, or political appointee, McKechnie will be working directly for the chairman, and not for the board itself. This is a first, as far as I know. Normally the lobbyist representing the federal agency works for the agency itself, or the board or panel that administers the agency.

I can foresee at least one initiative in which this may cause a problem. When the three-member NCUA board, then chaired by Norman D'Amours endorsed an extension of NCUA's auditing authority over independent third-party vendors as part of NCUA's Strategic Plan, the conservative Dollar said he believed it was an unwarranted extension of the federal government into the private sector. But that endorsement by the NCUA board survives and the board, while still headed by D'Amours, directed NCUA's lobbying team to work with Congress for the extended authority, which is now scheduled to "sunset," or expire, at the end of this year.

With such a scenario, what is the chairman's own lobbyist's responsibility? If he were to truly represent the chairman's position on this issue when asked by Congress, he would be contradicting the will of the NCUA board. Even if Dollar does not ask McKechnie to lobby on this particular issue, McKechnie is sure to be asked by lawmakers and their staffers what the chairman's feeling is on it.

Another position with which there will be a potential for conflict is the controversial community action plan, or CAP. Dollar dissented on the vote for a Community Reinvestment Act-like requirement for federally chartered community credit unions and has pledged to propose its repeal before next year's effective date. If the board is not persuaded to do so, the issue may go to Congress, where at least one influential lawmaker has vowed to overturn the CAP. If the NCUA board does not vote to repeal the CAP that means a majority of the three-member panel has endorsed it. What is the responsibility of the chairman's own lobbyist in that case?

An NCUA source close to Dollar insisted there will be no conflict on these or other issues that the full NCUA board has weighed in on. The source said Dollar believes in validity of the board's position, even when he is a dissenter.

This kind of conflict has arisen before in recent years. In more than one case, top NCUA executives, including General Counsel Bob Fenner and Public and Congressional Affairs Director Bob Loftus have had to chose between representing the chairman (D'Amours) or a disagreeing (warring) board colleague, (Yolanda Wheat). In all instances, they choose the chairman, begging the question: whom do NCUA department heads work for? Loftus' representation of D'Amours so soured Wheat, and Dollar, they eventually took to issuing their own press releases on board initiatives, often leaving reporters with three separate versions of events.

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