The Washington politicians are always claiming they are constantly looking for ways to reduce costs and reduce the burden on American taxpayers. They constantly profess ideas about how they feel government should be streamlined and made more efficient. What is interesting about their claims of making progress in that direction is the way they go about it.
By law, Congress has established scores of government agencies to oversee the activities of citizens and businesses. These agencies have been given the power to do everything from collect taxes to impose sanctions and investigate activities they believe to be in violation of the laws of this country.
In the financial services sector they created the Federal Deposit Insurance Agency (FDIC), Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB) to regulate, examine, monitor and oversee the activities of big banks, small banks, credit unions and, in the case of CFPB, those businesses along with everybody else who in some way interacts with the currency of our country.
In the case of each of those agencies, there are laws in place that address how the individuals who are charged with the day-to-day operations of them are to be selected. The requirements include nomination by the president of the United States and confirmation by the United States Senate.
One would like to think that individuals nominated and confirmed are believed to be qualified for those positions by the nominator and those who confirm them. There usually is an extended process of vetting the one chosen, interviewing individuals who know or have had some contact with the nominee and the actual questioning of the candidate to determine their qualifications and philosophy of regulation.
Upon completion of the process and receipt of approval to begin their jobs, one could conclude that there is an implied confidence of that job being done without continued involvement, in day-to-day decisions, by the administration or Congress. It may sound logical but then again this is Washington, D.C., where logic takes a back seat to common sense.
The recent suggestion by some in the credit union industry to return to an 18-month exam cycle has not yet had an opportunity to be studied and reviewed by the NCUA Board to determine the best way to implement such a change. And yet, some members of Congress have already sent a letter to NCUA Chairman Debbie Matz suggesting she immediately make the change. They cite the fact that FDIC and OCC have already moved in that direction and that NCUA could cut costs by doing the same. Forget about allowing the NCUA Board to make a decision based on a safety and soundness approach, just do it because others have already made the move. And the notion that costs will be cut and money saved is the typical Washington delusion.
On another issue, legislation to streamline bank call reports may be introduced in Congress. That is another good idea but not the job of elected officials.
It is clear, Congress wants to be hands-on and involved in the day-to-day operations of the nation's financial regulators. So rather than playing this piecemeal game, they should pass legislation that will give them what they want.
Eliminate the boards of FDIC, OCC and NCUA and the singular head of CFPB. Create a new committee in Congress to be called the Committee on Regulatory Control of Financial Activities. Appoint members to the committee in the same way all other appointments are made. The charge of the committee is to do the job of the positions eliminated.
Money will be saved and the Congress will get things done a lot quicker ... just as they do now. It will be another step, as one political candidate has said, "To make America great again."
Michael Fryzel is a former NCUA Board chairman and is currently an attorney in Chicago.
