[Senate Hearing 111-292]
[From the U.S. Government Publishing Office]
S. Hrg. 111-292
NOMINATION OF DEBORAH MATZ
=======================================================================
HEARING
before the
COMMITTEE ON
BANKING,HOUSING,AND URBAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
ON
THE NOMINATION OF DEBORAH MATZ, OF VIRGINIA, TO BE CHAIR OF THE BOARD
OF THE NATIONAL CREDIT UNION ADMINISTRATION
__________
JULY 22, 2009
__________
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COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
CHRISTOPHER J. DODD, Connecticut, Chairman
TIM JOHNSON, South Dakota RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York JIM BUNNING, Kentucky
EVAN BAYH, Indiana MIKE CRAPO, Idaho
ROBERT MENENDEZ, New Jersey MEL MARTINEZ, Florida
DANIEL K. AKAKA, Hawaii BOB CORKER, Tennessee
SHERROD BROWN, Ohio JIM DeMINT, South Carolina
JON TESTER, Montana DAVID VITTER, Louisiana
HERB KOHL, Wisconsin MIKE JOHANNS, Nebraska
MARK R. WARNER, Virginia KAY BAILEY HUTCHISON, Texas
JEFF MERKLEY, Oregon
MICHAEL F. BENNET, Colorado
Edward Silverman, Staff Director
William D. Duhnke, Republican Staff Director
Laura Swanson, Professional Staff Member
Joe Hepp, Professional Staff Member
Mark Oesterle, Republican Chief Counsel
Dawn Ratliff, Chief Clerk
Devin Hartley, Hearing Clerk
Shelvin Simmons, IT Director
Jim Crowell, Editor
(ii)
C O N T E N T S
----------
WEDNESDAY, JULY 22, 2009
Page
Opening statement of Senator Johnson............................. 1
Prepared statement........................................... 8
Opening statements, comments, or prepared statements of:
Senator Shelby............................................... 2
NOMINEE
Deborah Matz, of Virginia, to be Chair of the Board of the
National Credit Union Administration........................... 2
Prepared statement........................................... 8
Biographical sketch of nominee............................... 10
Responses to written questions of:
Chairman Dodd............................................ 21
Senator Vitter........................................... 21
(iii)
NOMINATION OF DEBORAH MATZ, OF VIRGINIA, TO BE CHAIR OF THE BOARD OF
THE NATIONAL CREDIT UNION ADMINISTRATION
----------
WEDNESDAY, JULY 22, 2009
U.S. Senate,
Committee on Banking, Housing, and Urban Affairs,
Washington, DC.
The Committee met at 3:02 p.m., in room SD-538, Dirksen
Senate Office Building, Senator Tim Johnson, presiding.
OPENING STATEMENT OF SENATOR TIM JOHNSON
Senator Johnson. I would like to call this hearing to
order.
Today the Committee considers President Obama's nominee-
designee to chair the National Credit Union Administration
Board. The NCUA charters and supervises Federal credit unions
and insures the deposits of over 89 million account holders in
all Federal credit unions and many State-chartered credit
unions.
As we face extraordinary stress and volatility in our
economy, we need strong, qualified, and competent regulators on
the job, especially as credit unions tackle unprecedented
challenges. I am pleased to introduce to the Committee the
President's nominee for this job, Deborah Matz.
When Debbie was last before us, she had been nominated to
serve on the NCUA Board as the minority member. She served with
distinction in that capacity from January of 2002 to October of
2005. When Debbie completed her last term, the Credit Union
Times wrote: ``Debbie Matz has proven to be one of the more
effective persons to ever wear an NCUA Board member hat. She
never stops looking for ways to make credit unions stronger and
better, . . . whomever replaces her . . . will have big shoes
to fill.''
Mrs. Matz has had a distinguished public and private
career. Among other positions, she served at the Department of
Agriculture where she was Deputy Assistant Secretary for
Administration and also chaired their Loan Resolution Task
Force, which was charged with the responsibility of resolving
over $1 billion in delinquent farm loans. Prior to her service
at USDA, Mrs. Matz was an economist with the Joint Economic
Committee of Congress.
In the private sector, Mrs. Matz was the Executive Vice
President and Chief Operating Officer of a large Federal credit
union.
I have known Debbie and her husband, Marshall, for over 20
years. While Debbie hails from New York, I think of her as an
honorary South Dakotan not just because of the amount of time
she spent in the State, but because of the heartland values she
embodies.
Debbie will provide extraordinary leadership as the Chair
of NCUA. President Obama has nominated a very qualified
candidate to protect the safety and soundness of the Nation's
credit unions during this difficult economic time. I urge the
Committee to support her nomination and to report it to the
full Senate for approval.
Let me now turn to Ranking Member for comments. Senator
Shelby.
STATEMENT OF SENATOR RICHARD C. SHELBY
Senator Shelby. Mr. Chairman, thank you. This is not the
first time Ms. Matz has been before this Committee, and I
believe she is highly qualified, and I would think that the
sooner the Senate got through the hearing and confirmed her to
the credit union, somebody would be in control over there. So I
look forward to trying to help her get confirmed.
Thanks.
Senator Johnson. Thank you.
Will the witness please stand and raise your right hand
while I administer the oath? Do you swear or affirm that the
testimony you are about to give is the truth, the whole truth,
and nothing but the truth, so help you God?
Ms. Matz. Yes.
Senator Johnson. Do you agree to appear and testify before
any duly constituted committee of the Senate?
Ms. Matz. Yes.
Senator Johnson. Thank you. Please take your seat.
Before you begin, please be assured that your written
statement will be part of the record. So if you could confine
your remarks to 5 to 8 minutes, that would be greatly
appreciated.
Please also note that the Members of this Committee may
submit written questions to you for the record, and you need to
respond to those questions promptly in order that the Committee
will proceed on your nomination.
Ms. Matz, thank you for joining us today. I would invite
you to introduce your family and friends in attendance before
beginning with your statement.
Ms. Matz. Thank you. My husband of 31 years, Marshall, is
here, as is our daughter, Hayley, who used to work for the
Senate and is now the press secretary at SBA; our son, Peter,
is in California, but I believe he is watching online. Hi,
Peter. And we have some cousins here: Jack and Rhoda and Mark
Berson and Dan and Sandy Krivit.
Senator Johnson. Thank you. Proceed with your statement.
STATEMENT OF DEBORAH MATZ, OF VIRGINIA,
TO BE CHAIR OF THE BOARD OF THE NATIONAL CREDIT UNION
ADMINISTRATION
Ms. Matz. Senator Johnson and Senator Shelby, thank you
very much for holding this hearing. Probably the best
compliment I could have gotten was being called an ``honorary
South Dakotan.'' I really appreciate that.
Senator Shelby. Especially right now.
[Laughter.]
Ms. Matz. I appreciate this opportunity to come before you
as President Obama's nominee to chair the Board of the National
Credit Union Administration. It is an honor to have been
nominated by the President and a privilege to appear before
this Committee.
As you indicated, this is an extraordinary time in the
history of financial institutions--including the credit union
industry. The current challenge has demonstrated the need for
financial regulators to be independent, insightful, and
innovative; to value transparency and accountability. Financial
regulators need to be visionary, strong leaders and adept at
implementing systemic change. These are traits that permitted
me to accomplish a great deal when I previously served as an
NCUA Board member, from January 2002 until October 2005, and
will be even more important as Board Chair in these difficult
times. During my term, I worked diligently to fairly and
thoughtfully implement the Federal Credit Union Act and to
ensure the safety and soundness of the Nation's federally
insured credit unions.
If I am fortunate enough to be confirmed, my top priority
will continue to be ensuring the safe and sound operation of
federally insured credit unions. Closely related goals will be
to make certain that NCUA thoroughly applies all relevant
consumer protections, promotes tools such as improved financial
education, and encourages credit unions to reach out to serve
all eligible consumers.
Perhaps my most notable accomplishment during my previous
service was encouraging credit unions to reach out to those in
their field of membership who may fall prey to unscrupulous
lenders. Through a series of workshops which I initiated called
Partnering and Leadership Successes, we taught thousands of
credit union officials best practices for serving these
populations. Credit union leaders learned that providing an
alternative to predatory lenders is not just the right thing to
do, it is good business.
It was also through my efforts that NCUA established an
Office of Small Credit Union Initiatives. This office serves as
a resource to provide technical and financial assistance to
small credit unions, which tend to serve the lowest-income
populations.
After my service from 2006 to 2008, I served as Executive
Vice President and Chief Operating Officer at a Maryland credit
union, where I experienced firsthand the effect of regulations
on credit union operations. This sensitized me to the need for
effective, rather than excessive, regulation. My 26-year
Government career includes 10 years on Capitol Hill as an
economist with the Joint Economic Committee and 8 years as a
senior executive at the Department of Agriculture.
Recently, as I know you are aware, corporate credit unions
experienced problems with mortgage-backed securities that
significantly affected their balance sheets. This necessitated
the conservatorship by NCUA of the two largest corporates.
While the severe economic downturn which propelled the
corporate credit union crisis was not predictable, there are
steps that could have been taken which might have mitigated or
prevented its effect on these institutions. In 2002, the last
time NCUA wrote a corporate regulation, I cast the lone vote
against it. I did not believe the crucial issue of risk
concentration was adequately addressed. I also believed that
the investment authority being granted was overly broad and
permissive, particularly in light of the complexity of the
financial instruments that were available to the corporates.
I mention this to underscore my view of the role of a
regulator as someone who listens, gets the facts and makes
independent judgments. If I am confirmed and assume the
chairmanship, I will apply these principles as NCUA begins a
new round of corporate rule making to address the current
problems. It is my commitment to you that, during the rule-
making process, I will consider all viewpoints, insist on
thorough analyses of data, be deliberative in approach, and
develop a rule that provides both appropriate safeguards and
sufficient opportunities for credit unions to thrive.
The stress and uncertainty of the corporate situation has
been difficult for the credit union industry. However,
throughout their history, credit unions have proven to be the
consumer's best friend. If confirmed as their regulator, I hope
to establish a strong working partnership with the industry
while maintaining the critical arm's-length relationship
between a regulator and the regulated. I assure that I will
regulate and supervise credit unions closely, guide them where
appropriate, make forceful suggestions, and to always appeal to
their commitment to their members. This is the promise that a
strong and credible Federal regulatory voice can and should
help credit unions fulfill.
I appreciate the chance to appear before you today and look
forward to working with Congress if I am confirmed. Thank you.
Senator Johnson. Thank you, Ms. Matz.
What do you see as your biggest challenge at NCUA? What do
you see as the biggest opportunities and challenges for credit
unions?
Ms. Matz. The biggest challenge right now is dealing with
the effects of the national economy, both in terms of the
retail credit unions and the corporates. As I indicated, two of
the largest corporates are in conservatorship, and one of the
challenges will be developing a rule that is fair and provides
flexibility, but at the same time provides sufficient
parameters to prevent these events from occurring in the
future.
I am told that we have not experienced the end of the
effects of the economy on the retail credit unions, and we will
have to monitor them closely and try to minimize the damage so
that credit unions can go forward and continue making loans and
serving the 89 million consumers that they do.
Senator Johnson. Would a new Consumer Financial Protection
Agency impact costs and lending for credit unions?
Ms. Matz. Well, one of the lessons that I think we have
learned is that there was no agency charged with the authority
to oversee consumer products and services, and as a result,
there are people who have lost their homes and are losing their
life savings. So I think it is important to have a central
agency to perform that purpose.
I think it will be successful if, in fact, it streamlines
the regulations and eliminates duplication and redundancy. I do
not know how the cost structure will work, but I am hoping that
it will not require additional assessments on credit unions
because some of the credit unions are seeing their retained
earnings decline right now, through no fault of their own, and
it would be difficult for some credit unions to pay an
additional assessment.
Senator Johnson. In the past several months, the NCUA has
faced many challenges with the corporate credit unions. The
NCUA has continued to work on its corporate stabilization plan.
How do you think this process is going so far? And will you
bring any new suggestions to the process once you are
confirmed?
Ms. Matz. The Corporate Credit Union Stabilization Fund,
which was initiated by this Committee and signed into law in
May has gone a long way toward stabilizing the credit union
system. It has permitted NCUA to assess credit unions over the
course of 7 years instead of in one lump sum, and that has been
a tremendous assistance to the entire system. So I think that
was a very necessary step.
The next big hurdle for NCUA will be drafting the corporate
credit union rule that I mentioned in my statement, and I am
hopeful that after meeting with the industry and talking to the
staff and all other relevant stakeholders, that we will have a
proposed rule by the end of the calendar year.
Senator Johnson. In today's economy, we need more
mainstream financial institutions providing access to short-
term lending. I hear from many credit unions in my State that
they are offering short-term credit products to their customers
with much success, yet we continue to hear of the need for
smaller-dollar loans.
How do you view credit unions being the solution to BD
lending in America? Do you have any specific ideas on how to
make short-term products work for consumers without encouraging
a cycle of debt?
Ms. Matz. That is an issue that has been near and dear to
my heart, and when I started the initiative that I mentioned
called ``Partnering and Leadership Successes,'' that was really
one of the goals--to demonstrate to credit union officials how
they can serve low-income people and those who are subject to
unscrupulous lenders. We spent a lot of time providing training
and best practices for alternatives to payday loans that credit
unions could provide. I believe a number of credit unions now
are offering these loans. A number of credit union leagues,
State leagues, have put together programs that the credit
unions in their State can participate in to offer these loans.
I felt so strongly about it and was so committed to this
idea that when I went to work as an officer at a credit union,
I initiated a program there that we called ``Cash To Go.'' It
was a credit union that served a large military population and
a large low-income population, and it was a wildly popular
program. It has to be done carefully, and it is not one that
credit unions are going to make profit on, at least initially.
But it is a good source of new members for them, and it is the
right thing to do. But it also needs to be combined with
financial education, because the people who are going to payday
lenders and pawnshops and rent-to-own shops really do not
understand the cycle of debt that they are getting into. And it
is very hard to break out of it once they get these loans, and
they just keep rolling them over.
And so I think credit unions are playing an important role
in educating their members, and even members of the community
who may not be credit union members, about why it is important
to do business with a credit union, because credit unions have
a cap of 18 percent on their loans. That is statutory. That is
the most they can charge.
But I think that there are plenty of opportunities for
credit unions to get more involved in that arena, and I
certainly will continue to encourage them to do so.
Senator Johnson. Senator Shelby.
Senator Shelby. Thank you, Mr. Chairman.
Credit unions, as I understand them, are by design set up
to serve the needs of their members. They do not have profit
motives, as I understand it. They have membership service as
their paramount goal. As such, why would a consumer protection
agency that has been proposed in the white paper by the Obama
administration be needed for them? You know, that has already
come under fire, the consumer protection agency under fire by
the Members of this Committee on both sides of the aisle, under
fire by the Federal Reserve Board, by the Federal Deposit
Insurance Corporation, by the Comptroller of the Currency. So
why would you need that in a situation like a credit union,
which are created for the members?
I belong to a credit union here, and, gosh, I do not know
why we would want a consumer protection agency that would be
the super czar over whatever you did and what products you
offer, as opposed to what products you could think of that
might meet the needs of some of your members, and you will have
a different membership. Ms. Matz.
Ms. Matz. Well, as a former and hopefully future Federal
regulator of credit unions, I think NCUA does a great job of
regulating the consumer products that the credit unions issue.
Senator Shelby. Who does this, now?
Ms. Matz. NCUA.
Senator Shelby. Yes. Well, they are your parent, so to
speak, where you are going--where you are now.
Ms. Matz. Yes, correct. Correct.
Senator Shelby. They are kind of the parent of the credit
unions.
Ms. Matz. I would not personally object if credit unions
were not included in this umbrella organization.
Senator Shelby. That is what I was getting at. I do not
know why you would need it. In other words, I was saying it was
perplexing to me why a credit union, which was created for its
members, serves its members, no profit, you know, nobody
looking at the edge and so forth, would need a consumer
protection agency, because your credit union in a sense is all
about consumers, is it not?
Ms. Matz. I could not agree more. The only caveat I would
say is that if this agency comes into existence and credit
unions are included, I think that credit unions should be
represented on the governing board, and the way it is set up
now, there----
Senator Shelby. I think it is a long way from being and
coming into existence. I hope.
Ms. Matz. OK.
Senator Shelby. I would like to move on to something else,
because I have just got a minute. As I see it--and Senator
Johnson got into a little of this, and you did, too--part of
the problem with the corporate credit union problems, which we
face with you, is that they concentrate risky assets on the
balance sheet of a few firms, and when the economy turns south
or sour, like it has, such concentration of assets can cause
real problems.
Going forward, how can we restructure the corporates so
they can serve without concentrating too much risk? I know they
serve a good purpose, but they were in all kinds of risky,
risky investments, as you well know.
Ms. Matz. Yes, and as I said, that is the reason that I
voted against the corporate rule in 2002, because I was
concerned that there were no caps or other regulations on the
investments, the type of investments or the concentration.
Although I know the staff has been working on putting together
a rule, I have not been briefed on it yet. But I can assure you
that this rule will be much different than the former rule was.
Senator Shelby. It has got to be confronted, has it not,
the corporate problem?
Ms. Matz. Absolutely.
Senator Shelby. Thank you, Mr. Chairman.
Senator Johnson. I want to thank Debbie again for being
here today. I look forward to working with the Members of the
Banking Committee to report her nomination to the full Senate
for approval in a timely manner.
This hearing is now adjourned.
[Whereupon, at 3:25 p.m., the hearing was adjourned.]
[Prepared statements, biographical sketch of nominee, and
responses to written questions supplied for the record follow:]
PREPARED STATEMENT OF SENATOR TIM JOHNSON
I would like to call this hearing to order.
Today, the Committee considers President Obama's nominee-designee
to Chair the National Credit Union Administration Board. The NCUA
charters and supervises Federal credit unions and insures the deposits
of over 89 million account holders in all Federal credit unions and
many State-chartered credit unions.
As we face extraordinary stress and volatility in our economy, we
need strong, qualified, and competent regulators on the job, especially
as credit unions tackle unprecedented challenges. I am pleased to
introduce to the Committee the President's nominee for this job,
Deborah Matz.
When Debbie was last before us, she had been nominated to serve on
the NCUA Board as the minority member. She served with distinction in
that capacity from January of 2002 to October of 2005. When Debbie
completed her last term, the Credit Union Times wrote: ``Debbie Matz
has proven to be one of the more effective persons to ever wear an NCUA
Board member hat. She never stops looking for ways to make credit
unions stronger and better, . . . whomever replaces her . . . will have
big shoes to fill.''
Mrs. Matz has had a distinguished public and private career. Among
other positions, she served at the Department of Agriculture where she
was the Deputy Assistant Secretary for Administration and also chaired
the Loan Resolution Task Force, which was charged with the
responsibility of resolving over $1 billion in delinquent farm loans.
Prior to her service at USDA, Mrs. Matz was an economist with the Joint
Economic Committee of Congress.
In the private sector, Mrs. Matz was the Executive Vice President
and Chief Operating Officer of a large Federal credit union.
I have known Debbie and her husband, Marshall, for over 20 years.
While Debbie hails from New York, I think of her as an honorary South
Dakotan not just because of the amount of time she has spent in the
State, but because of the heartland values she embodies.
Debbie will provide extraordinary leadership as the chair of NCUA.
President Obama has nominated a very qualified candidate to protect the
safety and soundness of the Nation's credit unions during this
difficult economic time. I urge the Committee to support her nomination
and report it to the full Senate for approval.
______
PREPARED STATEMENT OF DEBORAH MATZ
To Be Chair of the Board of the National Credit Union Administration
July 22, 2009
Thank you Senator Johnson and Members of this Committee for holding
this hearing.
I appreciate this opportunity to come before you as President
Obama's nominee to Chair the Board of the National Credit Union
Administration. It is an honor to have been nominated by the President,
and it is a privilege to appear before this Committee. If I could just
take a few minutes, I'd like to introduce my family members who have
joined me today. Marshall, my husband of 31 years, is here with our
daughter, Hayley, who until recently worked for the Senate and is now
press secretary at the SBA. Our son, Peter, is working in California
and could not join us--but he is watching online!
This is an extraordinary time in the history of financial
institutions--including the credit union industry. The current
challenge has demonstrated the need for financial regulators to be
independent, insightful, and innovative; to value transparency and
accountability. Financial regulators need to be visionary, strong
leaders and adept at implementing systemic change. These are traits
that permitted me to accomplish a great deal when I previously served
as an NCUA Board member, from March 2003 until September 2005, and will
be even more important as Board Chair in these difficult times.
For the three-and-one-half years of my term, I worked diligently to
fairly and thoughtfully implement the Federal Credit Union Act and to
ensure the safety and soundness of the Nation's then 9,000+ federally
insured credit unions which, at the time, held some $600 billion in
deposits.
If I am fortunate enough to be confirmed, my first priority will
continue to be ensuring the safe and sound operation of federally
insured credit unions. Closely related goals will be to make certain
that NCUA thoroughly applies all relevant consumer protections,
promotes tools such as improved financial education, and encourages
credit unions to reach out to serve all eligible consumers.
Perhaps my most notable accomplishment during my previous service
was encouraging credit unions to reach out to those in their field of
membership who may fall prey to unscrupulous lenders. Through a series
of workshops which I initiated called Partnering and Leadership
Successes (PALS), we taught thousands of credit union officials best
practices for serving these populations. Credit union leaders learned
that providing an alternative to predatory lenders is not just the
right thing to do, it is good business.
It was also through my efforts that NCUA established an Office of
Small Credit Union Initiatives. This office serves as a resource to
provide technical and financial assistance to small credit unions,
which tend to serve the lowest income populations.
After my NCUA service, from 2006-2008, I served as Executive Vice
President and Chief Operating Officer at a Maryland credit union. This
permitted me to experience firsthand the effect of regulations on
credit union operations. It sensitized me to the need for effective,
rather than excessive, regulation. My 26-year Government career, of
which I am very proud, includes 10 years on Capitol Hill as an
economist with the Joint Economic Committee, and 8 years as a senior
executive at the Department of Agriculture; three as Deputy Assistant
Secretary for Administration.
Recently, as I know you are aware, corporate credit unions
experienced problems with mortgage-backed securities that significantly
affected their balance sheets. This necessitated the conservatorship,
by NCUA, of the two largest corporates, U.S. Central and WesCorp. While
the severe economic downturn which propelled the corporate credit union
crisis was not predictable, there are steps that could have been taken
which might have mitigated or prevented its effect on these
institutions. In 2002, the last time NCUA wrote a corporate regulation,
I cast the lone vote against it. I did not believe the crucial issue of
risk concentration was adequately addressed. Additionally, I believed
that the investment authority being granted was overly broad and
permissive, particularly in light of the complexity of the financial
instruments that were available to the corporates.
I mention this to underscore my view of the role of a regulator as
someone who listens, gets the facts and makes independent judgments. If
I am confirmed and assume the Chairmanship, I will apply these
principles as NCUA begins a new round of corporate rule making to
address the current problems. It is my commitment to you that, during
the rule-making process, I will consider all viewpoints, insist on
thorough analyses of data, be deliberative in approach and develop a
rule that provides both appropriate safeguards and sufficient
opportunities for credit unions to thrive.
The stress and uncertainty of the corporate situation has been
difficult for the credit union industry. However, Congress has
encouraged credit unions to continue to offer quality products to
consumers. I want to echo that desire--credit unions have proven
throughout their history to be the consumer's best friend. If confirmed
as their regulator, I hope to establish a strong working partnership
with the industry while maintaining the critical arm's-length
relationship between a regulator and the regulated. I assure you that I
will regulate and supervise credit unions closely, guide them where
appropriate, make forceful suggestions, and always appeal to their
commitment to their members. This is the promise that a strong and
credible Federal regulatory voice can and should help credit unions
fulfill.
I appreciate the chance to appear before you today and look forward
to working with Congress if I am confirmed. Thank you.
RESPONSES TO WRITTEN QUESTIONS OF CHAIRMAN DODD
FROM DEBORAH MATZ
Q.1. The Administration is proposing to create a separate
Consumer Financial Protection Agency (CFPA) which would cover
both regulated and unregulated entities in order to ensure
consistent, marketwide regulation of mortgage and consumer
credit. Do you agree that such consistency in consumer
protection regulation for all lenders is important?
A.1. First and foremost, consumer protection should be an
absolute priority for all financial institution regulatory
entities. During my prior service on the NCUA Board I
demonstrated a strong and thorough commitment to making certain
that consumers received adequate protections from the NCUA, and
I will renew this commitment should I become Chairman. This
essential role for financial regulators has assumed greater
importance given the complex and rapidly changing nature of
financial markets, and the associated events that have caused
or exacerbated the current economic difficulties.
I strongly support increased consistency in the consumer
protection regime, as contemplated in the proposed CFPA. If
Congress decides to consolidate consumer protection functions
under a single regulatory entity, as is currently being
proposed by President Obama, I would do everything I could as
NCUA Chairman to assist in these efforts and provide
constructive suggestions as to how to make a new system work
better for credit unions and their members. As I stated during
my testimony before the Senate Banking Committee, consumer
protection must be a principal concern for any financial
regulator, and I would encourage Congress and the President to
devise a system that improves the effective oversight of
consumer protection through streamlined, coherent regulatory
processes and elimination of duplication. I also believe that
it would be beneficial to construct the new agency in a way
that minimizes costs and administrative burdens on the
financial institutions themselves, and maximizes the efficient
delivery of consumer protection functions.
Q.2. To that end, do you agree that, assuming the CFPA is
created, it should have rule-writing authority that covers all
regulated and unregulated financial institutions?
A.2. Yes. Consumers will benefit from any enhancements to
regulatory authority that tangibly improves consistency and
efficiency in the administration of consumer protection
regulations. Rule making is an essential part of regulatory
oversight; it ensures practical effects in the marketplace. I
would favor any improvements to the overall regulatory
structure that highlight efficiencies inherent in a
consolidated consumer protection-focused entity, while at the
same time complement the safety and soundness practices of
current functional regulators.
------
RESPONSES TO WRITTEN QUESTIONS OF SENATOR VITTER
FROM DEBORAH MATZ
Q.1. Ms. Matz, on July 20, 2009, the Credit Union Journal
reported that you are preparing to hire your two top staff, and
that that these staffers have been involved with industry
groups that lobby the NCUA.
How can you assure this Committee that the NCUA, under your
supervision, will be able to remain independent under these
circumstances and refrain from showing favoritism for the
interest of those groups that previously employed your staff?
A.1. I was not interviewed for this article and do not know the
basis for the article. As you may know, I served on the NCUA
Board from 2002-2005 and was widely regarded as a person who is
judicious, independent and has high ethical standards. If
confirmed by the Senate as NCUA Board Chair, I assure you that
these traits will once again define my tenure. I have not
offered positions to anyone--and will not do so until I am
confirmed.