Since becoming director of the National Credit Union Administration's office of examination and insurance six years ago, D. Michael Riley has learned that his decisions are not always popular amongst his constituents.

In fact, some credit union officials joke that the initial "D" in Mr. Riley's first name stands for "damn."

His NCUA colleagues, however, describe him as intelligent, forthright, and conservative - especially when it comes to examination procedures and protecting the credit union insurance fund.

For his part, Mr. Riley, a native of Tuscaloosa, Ala., simply drawls, "you have to have an awfully thick skin. You can't take criticism personally."

Avoiding Insolvency

Meanwhile, the 45-year-old Mr. Riley continues to fight for policies he believes will help credit unions avoid the path to insolvency that was followed by both the bank and thrift insurance funds.

Last month, Mr. Riley demonstrated how determined he is to avoid the fate of the now-defunct Federal Savings and Loan Insurance Corp. and of the Federal Deposit Insurance Corp.'s Bank Insurance Fund. He advised the NCUA board to assess credit unions a whopping 8.3 cents for each $100 in deposits, the first assessment for the insurance fund in seven years.

The decision angered some credit union chiefs, as well as the powerful Credit Union National Association, which argued that the full premium was unnecessary.

Mr. Riley has also pushed for stricter limits on business loans. The same day the board assessed the premium, it voted to tighten its rules on business loans even after getting more than 1,000 comment letters from credit unions, many favoring the status quo.

Adviser to NCUA Board

"Sometimes, we have to make decisions that are not popular," Mr. Riley said. "My job is to try and keep the board advised. I have to forget all of the political things. In terms of the premium, we have to look at what is in the long-term interest for the NCUA and the credit unions."

Some credit union officials say Mr. Riley is perhaps the most influential staff member at the NCUA. He sets policy affecting regulations, examination, and insurance functions. He's also responsible for the agency's 700 examiners and is steward of the $2.4 billion credit union insurance fund.

Mr. Riley "is clearly the doorkeeper" for information to the board, said Wendell Sebastian, the NCUA's former executive director and general counsel, who is now executive vice president of TAmpa, Fla.-based GTE Federal Credit Union. "He controls the information the board gets. His is the information they rely on.

"He is the kind of people will seek opinion from," Mr. Sebastian continued. "I believe there are brighter people in the agency; I believe there are people who are more hard-working than he is - but they are not combined with the same effervescent and witty personality he has."

Subordinate's View

Timothy P. Hornbrook, the NCUA's director of the department of supervision, who reports to Mr. Riley, characterized his boss as one with a "great amout of influence in the agency."

"I think he has the ear of the board," Mr. Hornbrook said.

Mr. Riley joined the NCUa as an examiner in 1972.

In the early 1980s, he became regional director of the agency's California office. There, he met Kenneth Robinson, commanding general of the U.S. Marine Corps base at Camp Pendleton.

Mr. Robinson, who looms large in the credit union business today as president of the National Association of Federal Credit Unions, asked Mr. Riley to sit on the board of a troubled credit union, and he was impressed with what he saw.

An Insistence on Precision

Mr. Riley insisted the credit union officials first describe the institution's problems - in writing - and then list the steps that would be needed to nurse it back to health.

"He insisted on a preciseness," Mr. Robinson said.

Mr. Robinson said that Mr. Riley "depends on logic more than bravado. He will analyze you right into a corner."

One corner Mr. Riley wants to see credit unions avoid is the one banks are currently trapped in - real estate.

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