WASHINGTON - Armed with one of the longest resumes of any NCUA nominee, Chicago lawyer Michael Fryzel breezed through a confirmation hearing before the Senate Banking Committee last week.
But the prospects for the Republican candidate to succeed NCUA Chairman JoAnn Johnson are uncertain because Democrats in control of the Senate continue to delay Bush administration appointments as the president’s term nears a year-end conclusion.
Democratic Senate Majority Leader Harry Reid of Nevada has told colleagues he is reluctant to hold confirmation votes on any appointments that would run beyond the Bush term and has held up dozens of nominations as a result. Fryzel, if confirmed, would serve out more than five years remaining on the NCUA seat.
Moreover, if confirmed by a vote of the full Senate, as required, Fryzel would retain a two-to-one Republican majority on the three-member NCUA Board.
Several sources indicate, however, that the senators are working on a deal that would allow a vote on some Republican nominees, like Fryzel, in exchange for a vote on Democratic nominees, like the two Securities and Exchange Commission candidates the Senate Banking Committee reviewed alongside Fryzel last week. “My hope is that Fryzel would be part of that,” said John Magill, chief lobbyist for CUNA, last week.
With nine other nominations to review, Fryzel’s received little attention during last week’s hearing.
The former state regulator and long-time credit union attorney told the senators his regulatory philosophy is based on two main principles, the safety and soundness of the institutions he would oversee and consumer protection.
Despite his long-time industry ties, he emphasized an arms-length stance with the regulated. “We will work cooperatively with the industry but will not hesitate to exercise regulatory authority when necessary,” he told the senators.
In response to a question from Connecticut Sen. Christopher Dodd, chairman of the banking panel, Fryzel said he believes credit unions should still be regulated differently than banks because they are still distinguished by their cooperative structure. He said despite the recent blurring of the common bond, credit unions are still restricted on whom they may serve. “It’s still a defined area,” Fryzel noted.
The next step in the process is for the Banking Committee to vote whether to endorse Fryzel, who is expected to get the panel’s backing. After that, the nomination must be voted by the full Senate.
The candidate is one of the most experienced in the credit union industry to be nominated for the NCUA Board.
He served under Ed Callahan when Callahan was director of the Illinois Department of Financial Institutions, then became director of the state bank and credit union agency when Callahan moved to Washington in 1982 to be chairman of NCUA. He served eight years as director of the DFI.
He has also served the past 16 years on the state’s CU Advisory Board–known formally as the Governor’s Board of Credit Union Advisors–as a director for private credit union insurer ASI, and has represented many credit unions in his Chicago law practice.
His long credit union ties, however, do not disqualify him from the NCUA Board under the Federal CU Act’s limit on one member having credit union experience (current member Gigi Hyland was general counsel for Empire Corporate FCU) because Fryzel has never worked directly for a credit union, according to NCUA.
Even if the Democratic leaders in the Senate agree to vote on the Republican nominee, the next president will soon after have a chance to shape the NCUA Board, as one more term, Republican Rodney Hood’s, expires next April. The next president, if it is a Democrat, could appoint a Democrat to that seat and designate one of the two Democrats (Hyland is a Democrat) as chairman.
