Letter to the Editor from NCUA Board Member Michael Fryzel in Response to “Is NCUA Trying to Destroy Small Credit Unions”

Mr. Randy Smith
Publishing/Managing Editor

Dear Randy:

In his article published in the May 23, 2012 edition of CUinsight, entitled Is NCUA trying to Destroy Small Credit Unions, Stephen Nelson recounts what he claims are actual conversations with presidents and examiners of small credit unions. However, if you read the Q&A’s he lists, it is clear Mr. Nelson has a vivid imagination. Only in his mind would such an exchange of words take place between a credit union president and an examiner.

In my experience in dealing with credit union executives and examiners, both as a regulator and attorney in private practice, I have never heard either of those individuals use such words as “blight on the land”, “idiot”, “fool” or “threat to the insurance fund” when talking to each other.

Reading further, Nelson states “all credit unions not just small ones—feel like NCUA is trying to push them out of business.” He also feels every government agency, including NCUA, “has no consistency and act like tyrants.”

Well Steve, I beg to differ with you on almost all counts. The only one I will give you is consistency. We at NCUA have been working on that for some time but are confident that on July 1st of this year when the National Supervision Policy Manual is introduced it will ensure fair and consistent exams for all credit union across the entire country.

As for everything else, your statements and conclusions are unfounded, off base and just not correct.

NCUA has a commitment to all credit unions and to the system as a whole. Our goals are simple: protect the deposits of more than 92 million Americans, a safe and sound credit union system and a strong share insurance fund.

Our continued efforts to provide regulatory relief were most recently highlighted by the Boards action relating to Reg Flex and Troubled Debt Restructuring. Taking into consideration credit union comments and suggestions, the Board responded by approving revised regulations that have been enthusiastically welcomed by the industry.

As to small credit unions, our help and assistance to them far surpasses any other federal regulator. Our Office of Small Credit Union Initiatives (OSCUI) headed by Bill Myers does an outstanding job in providing guidance and assistance.

As Mr. Myers has been quoted saying, “The role of our office is to make sure small credit unions survive and thrive. We are constantly looking at the field and the statistics. We’re also examining business models to see how small credit unions grow and provide training, consulting and online resources to assist small credit unions.”

OSCUI has a phenomenal record of working with small or trouble credit unions to resolve problems. Mr. Myers says it best. “We typically run into two issues. In some instances the credit union waits too long to ask for help and it becomes more difficult to provide assistance in order to turn the situation around. Perhaps if the credit union saw the rising tide sooner to request assistance, it would not be in a troubled position.”

“Secondly, we don’t save the credit union, but provide the education and resources to the credit unions that want to be saved. You need the board and management behind revitalizing the credit union, as well as having a succession plan. In the event where the manager becomes ill, injured, or dies and there’s no one in the number two position, you run into trouble.”

In addition, NCUA has in the works a comprehensive training video aimed at helping small or troubled credit unions. The video will address the signs credit unions should be aware of and the importance of preparedness. The video will also address the best practices merger and teach credit unions that are in the position to merge how to field offers and discern which offer will be beneficial to both staff and members.

“Acting like a tyrant?” “Trying to put them out of business?” I don’t think so Stephen. Not at the NCUA I know.


Michael E. Fryzel
Board Member

National Credit Union Administration
1775 Duke Street
Alexandria, VA 22314-3428

Michael Fryzel

Michael Fryzel

Michael Fryzel is the former Chairman of the National Credit Union Administration and is now a financial services consultant and government affairs attorney in Chicago. He can be reached at ... Details