Matz to home-based credit unions: Drop dead
With the tone of a parent anxious to get their free-loading college graduate to get his own place, Chairman Matz proclaimed Friday in an interview with CU Times that the days of the erstwhile home-based credit union are over. Not withstanding the fact that the regulation requiring existing home based credit unions to find office space within two years is still pending, Matz told CU Times that as credit unions grow “I don’t think there is any justification for having a financial institution in somebody’s house. I really think those days are over.”
As for those of us who believe that home-based credit unions are an important part of credit union history, Chairman Matz said, basically, what’s your point? She stole one of my favorite metaphors when she pointed out that even though the “buggy whip was useful in its time, it’s not useful anymore. . .”
A few quick thoughts:
- Of all the issues for NCUA to get fired up about, why, why, why is the Chairman so fired up about home-based credit unions? There are approximately 7 such credit unions in New York State and nationwide, they represent a miniscule fraction of the industry. Does their continued existence seriously pose a threat to the safety and soundness of credit unions? If so, the industry is in much worse shape than I thought.
- Do home-based credit unions really pose a safety threat to examiners? Of course not. Unless there is an epidemic of people setting up home-based credit unions so they can prey on examiners, this argument strikes me as somewhat paranoid. To the extent that examiners simply feel that someone’s home is not the proper place to be doing an audit, then simply pass a regulation giving examiners the authority to mandate that examinations take place outside the home, perhaps at NCUA headquarters or another credit union.
