[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

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs


      Available at: http: //www.access.gpo.gov /congress /senate/
                            senate05sh.html






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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.
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