NCUA’s Matz tells Amplify Crowd: ‘Our Job is to Help Credit Unions Move Forward’

NWCUA President and CEO Troy Stang makes NCUA Chairman Debbie Matz an honorary Duck before her keynote address Tuesday to the Association’s Amplify Convention in Portland.

Credit unions say they face a regulatory burden that often feels oppressive, but NCUA board Chairman Debbie Matz said Tuesday that the federal regulator has taken significant steps to ease that burden, and she insisted that “gone are the days when we say no simply because we’ve always said no.”

“We are working hard,” she said, “to get to yes.”

Matz, whose keynote address kicked off the Northwest Credit Union Association’s annual Amplify Convention in Portland, said that she understands the concern over rules and regulations. But she said there would never be a point, “no matter how many regulations we rolled back,” when credit unions felt that there was no burden.

That’s why the NCUA seeks to make sure that the regulations it does create are effective, minimally burdensome and have no unintended consequences, she told a standing-room-only crowd at the Hilton Portland & Executive Tower. “The NCUA cannot hold credit unions back,” she said. “Our job is to let credit unions move forward, but safely and securely.”

The NCUA will continue the Regulatory Modernization Initiative she started in 2011, Matz said, to look for ways to streamline some regulations and make others more understandable and easier to follow. Since 2011, she said, the NCUA has:

  • Exempted credit unions with assets of up to $50 million from certain rules;
  • Eased troubled debt restructuring;
  • Facilitated low-income designations;
  • Permitted blanket waivers for member business loans;
  • Included video tellers as service facilities; and
  • Added Treasury inflation-protected securities.

And just on Tuesday, Matz said, the NCUA let credit unions know of its plan to streamline exam reports, starting in 2014. But the “healthy tension” between the NCUA and the credit unions it regulates will never completely go away.

“We need to do our job,” Matz said, “to target areas of risk and make sure the system is safe and secure.”

 She said she is particularly concerned about interest-rate risk – “It keeps me awake at night” – and she urged credit unions to develop policies now to deal with the amount of long-term, low-interest loans on their books and rate sensitivities in their deposits.

“Interest rates are already rising,” Matz said. “The only question is, ‘How far, and how quickly?’”  If rates go up precipitously, she said, many credit unions without a plan “will not survive.”

Also on her radar:

  • Third-party risks: Credit unions gain economies of scale from working with third-party vendors and Credit Union Service Organizations, but those relationships are not without risk and the NCUA is now looking at creating a CUSO registry. “Trust, but verify,” Matz said.
  • Cyber-security risks: Credit unions need to perform risk assessments, establish incident response programs and build in mitigation processes to deal with cyber-security threats, Matz said. Among her concerns: distributed denials of service, Web application attacks, computer malware and social-engineering attacks, as well as cyber fraud.
  • Off-balance-sheet risks: Executive benefits and pension plans on their face are harmless enough, Matz said, but they are higher-risk, non-compliant investments and credit unions need to make sure they are not taking on more than they can afford. 

“You need to be aware of these risks and do your due diligence,” Matz told credit union leaders, and she vowed to work with them to protect the security and safety of the credit union system by trying to issue regulations that are “targeted to areas of risk and the institutions affected by that risk.”

“My goal,” she said, “is to set the standard for what a regulator should be” and to give credit unions the tools they need to be competitive.

“We need not only to keep up with the industry,” she said. “We need to stay ahead of it.”

Questions? Contact Gary Stein: 503.350.2216,

Posted in NCUA.