D. Michael Riley, the top examiner at the National Credit Union Administration since 1985, is being demoted.
The agency announced Friday that Mr. Riley will trade jobs with Mid-Atlantic Director David Marquis at the end of the month.
Although agency officials said director positions are considered to be on equal footing, Mr. Riley is losing a substantial amount of power and taking an $18,000 cut in pay, to $131,000 from $149,054.
Under former NCUA Chairman Roger Jepsen, whose term expired last year, Mr. Riley was considered the agency's most influential staff member in setting policy.
Now, Mr. Marquis is moving up to NCUA's director of examination and insurance. He will be the steward of the insurance fund and responsible for all credit union examiners.
Mr. Marquis joined the agency in 1978, and was named Mid-Atlantic regional director last year.
He also has served as associate director of the agency's Northeastern region and as deputy director of examination and insurance.
To 'Reinvigorate' Agency
But NCUA Chairman Norman E. D'Amours said the reshuffling was not a rebuke.
"This is not about doing something negative," Mr. D'Amours said.
"It's good to reinvigorate and refresh certain positions and not see them as lifetime appointments.
"Mike likes the idea, Dave likes the idea," Mr. D'Amours added.
Mr. D'Amours said he wants to foster an agency culture in which such moves are seen as benefiting the agency, not as reprimands.
"Rather than having people settle into positions, I'd like positions to be seen as assignments," he said.
Industry and agency sources who requested anonymity suggested that there are other motivations for the switch.
Mr. Riley and Mr. D'Amours held different views on a range of supervisory issues and frequently humped heads, sources said.
Some said it may have been motivated by a wide-ranging congressional probe of the agency and the credit union industry, spurred by U,S. Central Credit Union's investment in a troubled Spanish bank.
Last month Mr. D'Amours yanked supervision of corporates from Mr. Riley's purview, and created the Office of Corporate Credit Unions.
By moving Mr. Riley, sources said the agency was trying to head off congressional criticism.
'For the Agency's Good'
Mr. D'Amours dismissed SUch speculations as gossip and praised Mr. Riley's work for the agency.
"I have nothing but the highest regard for Mike Riley," Mr. D'Amours said. "The agency is in his debt."
Mr. Riley joined the agency as an examiner in 1972. He also headed the separate office of examination and risk management in the headquarters, and he also served as Pacific regional director.