Senate leaders indicated last week their intent to confirm the two nominees for the NCUA Board and replenish the three-member panel, currently consisting of just NCUA Chairman JoAnn Johnson.
Senate Banking Committee Chairman Richard Shelby (R-AL) and other senators expressed their support for the two NCUA candidates, Republican Rodney Hood and Democrat Christine Gigi Hyland, with Shelby indicating he planned to have the panel vote quickly on an endorsement, then move the two nominations to a speedy vote by the full Senate.
The sole issue raised about Hyland, one of the most experienced candidates ever nominated for the NCUA Board, was whether her long-time work in the credit union industry might affect her ability to act as an independent regulator. "If you were to be confirmed-and I predict you will be-your responsibilities will change from that of an advocate to an independent regulator. To that extent, should a regulator appear to be an industry advocate?" asked Shelby.
But Hyland, who works as general counsel for Empire Corporate FCU and worked for several years as a CUNA lobbyist as well as a credit union lawyer, anticipated the question and insisted she will set the safety and soundness of credit unions as her top priority. "There is a line to be drawn, in terms of listening to the industry and listening to staff, while balancing the (responsibilities) of a regulator," she responded to Shelby.
The issue is an important one, according to industry observers, as the influence with NCUA of the credit union lobby groups, particularly CUNA, has grown in recent years; first with the appointment of CUNA Vice President Steve Bosack as top aide to former NCUA Board Member Deborah Matz, then with the hiring of former CUNA board member and CU CEO Holly Herman as top aide to Chairman Johnson.
Hyland also addressed the matter in her prepared statement to the Senate committee. "With all of this credit union experience, can I serve as an effective independent regulator? Yes. I believe my career in the credit union system enhances my ability to balance safety and soundness considerations with the needs of the institutions regulated," she stated.
A graduate of CUNA's Development Education Program, Hyland also stressed her belief in the traditional purpose of credit unions to serve people of modest means, and she assured Sen. Shelby she will work to monitor credit unions' adherence to that purpose if she is confirmed.
When Shelby asked Hood what he sees as the most threatening trend for credit unions, Hood cited the risks to the federal tax exemption, which will be reviewed during a hearing this week by the tax-writing House Ways and Means Committee. "If (repeal of the tax exemption) were to come to fruition it would have such an adverse affect on credit unions' ability to serve the needs of underserved individuals," Hood told Shelby.
Hood, who as associate administrator of the Rural Housing Service at the Department of Agriculture helps manages a $43-billion loan portfolio, told committee member Mel Martinez (R-FL), the former director of Housing and Urban Affairs, he believes credit unions can be major contributors to providing affordable housing. He stressed the need for public and private sector partnerships, while seeking new solutions "outside the box."
The NCUA Board operated with two members for the past year and has been down to just the one, Chairman Johnson, since Deborah Matz left at the end of August. Johnson conducted a rare NCUA Board meeting with just one sitting member earlier this month, when she approved amendments to the agency's fidelity bond rules. But she is unlikely to embark on anything substantive until the new members are confirmed. That is expected to be by the next board meeting, now scheduled for the end of November.
Both candidates were boosted by appearances from their hometown senators. Sen. John Warner, the senior senator from Virginia who supported Hyland's nomination, appeared briefly before the committee to tout Hyland's candidacy, which was originally put forward by Senate Minority Leader Harry Reid (D-NV).
Nominees' Backgrounds
Republicans Elizabeth Dole, a banking panel member, and Richard Burr, both of North Carolina, praised Hood's career in public service and his work in government.
Hyland is a native of Alexandria, Va., where she worked just down the road from NCUA as a lawyer for her parents' credit union law practice, Hyland & Hyland, then served as executive director of the Association of Corporate CUs, before going to work for Empire Corporate FCU.
Hood worked as a youth as a missionary in Africa, then as a professional as director of the emerging markets group of Wells Fargo, marketing director for the North Carolina Mutual Life Insurance Co., and community development project manager for Bank of America, before joining the agriculture department.
