ALEXANDRIA, Va. - After nine months as the National Credit Union Administration's top examiner, David M. Marquis, is stepping out from the long shadow cast by his predecessor.
One of the agency's youngest top officials, the 40-year-old Mr. Marquis has ingratiated himself with the agency's inner circle - becoming a member of Chairman Norman E. D'Amours' kitchen cabinet - and has played a role in major policy and regulatory initiatives.
Observers said although he doesn't carry the same clout that D. Michael Riley once wielded as director of examination and insurance, Mr. Marquis is making his presence felt.
Mr. Marquis said some believed he was too young for the job, but he never had any doubts.
"There was not a lot of adjustment to make," said Mr. Marquis, who has held eight posts during his 17 years with the NCUA. "Compared to other people I have had a real broad background, where I've touched on key aspects of the agency. That's the biggest thing I've brought to the table here."
Mr. Marquis joined the NCUA almost a year out of college in 1978, as an examiner in its Mid-Atlantic region. He worked his way up through the ranks, in the agency's headquarters and regional offices. In 1993, he was made director of the agency's Region 2, where he had started.
A diligent worker who clocked 11-hour days, Mr. Marquis was seen as a comer when Mr. D'Amours took office in late 1993.
Mr. Marquis got his break with the new regime early last year, when the NCUA's new executive director, Karl Hoyle, charged him with finding ways to trim the agency's staff - a difficult assignment for an agency veteran.
"You're working and dealing with folks you've worked with for years and at the same time you can't be blind to what you see," Mr. Marquis said.
The mission, which ran from February through April, led to the purging of 34 positions, the rearrangement of several departments, including the elimination of some offices, and to the smallest budget increase in recent years - about 1%.
The success of the project helped Mr. Marquis' star rise just as Mr. Riley's was falling.
Under the previous NCUA chairman, Roger Jepsen, Mr. Riley had wide latitude to guide agency policy. But under Mr. D'Amours, a far more hands- on regulator, his influence was curtailed.
Further, supervision of corporate credit unions was stripped from Mr. Riley's purview in 1994, although not as a result of Mr. Marquis' study.
The final slap came in July, when Mr. D'Amours ordered Mr. Riley and Mr. Marquis to swap jobs. The move pushed Mr. Riley from the agency's headquarter's staff and trimmed $18,000 from his paycheck. He quit before serving a day as the Region 2 director.
Agency observers and insiders said the big difference between Mr. Riley and Mr. Marquis is the role they are permitted to play under their respective chairman.
While Mr. Riley set policy single-handed, Mr. Marquis executes what is hammered out by the board - with Mr. D'Amours and his closest advisers playing the leading role. Mr. Marquis is in Mr. D'Amours' entourage, along with Mr. Hoyle and a handful of other agency officials.
"That's the way it should be," said one high-ranking agency official. "Policy should come from the board, not the staff."
Another NCUA source put it differently: "Mike was more of a cosmic thinker; Dave is more of a nuts-and-bolts kind of guy."
Mr. Marquis may be more of a team player than his predecessor, but he said he takes orders from no one.
"On the examination side and supervisory side I always go by the notion of 'Trust me or relieve me,'" he said.
He added that he and Mr. D'Amours did go through a period of sizing each other up.
"Every time you get a new chairman you have to let them know who you are, what you are - you have to prove yourself," he said.
Apparently he has. Although corporate credit unions are no longer under his office, Mr. Marquis has had a hand in drafting the agency's proposed regulations for them. He also participated in the resolution of Capital Corporate Federal Credit Union.
The failure of Cap Corp, Lanham, Md., brought on by speculation in collateralized mortgage obligations, has prompted the agency to review the investment powers of regular credit unions as well as corporates.
Mr. Marquis' office will craft the far-reaching rules for regular credit unions, and he expects to present a proposal to the board in September or October.
Mr. Marquis said the new regulation will update authorized and prohibited instruments and establish asset-liability management guidelines for such volatile securities as CMOs. The regulations also will address such issues as written investment policies, the knowledge and skills of investment officers, and bidding processes with broker-dealers.
A need for new credit union investment regulations was shown by the agency's finding that of 300 institutions with CMO holdings exceeding their capital, 39% "didn't have a clue of what the risks were," he said.
"We need to have policy to address that," he said. "That's unsafe and unsound."
The disparity between sophisticated credit unions and their smaller brethren will make writing a rule tricky, he said.
"It has to protect the safety and soundness of those in a complex investment arena but not overwhelm those that stick to a basic investment scheme," he said.
Mr. Marquis said he will discuss the proposal with credit unions and trade groups before taking it to the board.
He already has received comments from the regional directors. He said he will respond to the suggestions, explaining why some were accepted and others rejected. Mr. Marquis said none of his predecessors took the time to respond to suggestions from employees in the regions.
"That was always a pet peeve of mine," he said.
Another tangible indicator of growing influence in the agency, two of Mr. Marquis' colleagues from the Mid-Atlantic region recently have gained high positions in the headquarters. This year Peter Majka was tapped as director of the Office of Community Development Credit Unions, and Edward Dupcak was made director of the Office of Investment Services.
But Mr. Marquis seems less interested in building a kingdom than in doing his job.
"E&I functions in the same way as before," he said. "There's just a different person running it."
