NCUA Board Member Michael Fryzel Addresses N.J. CUs

Tuesday, June 26, 2012 12:24:00 PM

JAMESBURG, N.J. – When asked if NCUA was gearing up for any major regulatory relief, NCUA Board member Michael Fryzel said a major relief effort is not in the cards given the climate in Washington, D.C., but he stressed that the agency is committed to evaluating its current regs for relief measures.

Fryzel urged New Jersey credit union leaders at yesterday’s Q&A session to utilize its trade associations to communicate about regs that may need to be updated. One area of concern among attendees was the requirement to have a physical presence within 25 miles of a targeted membership population. With the ubiquity of online and mobile banking applications, attendees questioned whether the ability to serve a population should even include a physical location.

NCUA Board Member Michael Fryzel addresses New Jersey credit union leaders, discussing regulatory hot topics.

Fryzel stressed the importance of comment letters on proposed regulations. Due to comments from the system, NCUA is currently re-evaluating its proposed CUSO rule and loan participation rule. Fryzel did note some concerns over the costs NCUA would incur to implement the proposed CUSO rule in its current form.

Fryzel served in the NCUA chairman role during the early days of the corporate disruption and helped pass legislation to increase the borrowing authority of the Central Liquidity Facility. He believes that the corporate system will emerge much stronger because of the actions NCUA took with the stabilization fund and with the revised corporate reg. Fryzel highlighted the consolidation and shrinking asset base of the corporate system, going from 27 corporates with $95 billion in assets in 2007 to 21 corporates with $34 billion currently. With pending mergers, the number of corporates will likely drop to 15 by year-end. 

On the examination front, Fryzel said the agency is coming out with a new examination manual in an effort to drive consistency between NCUA’s five regions. He said the agency is aware of the industry’s concern over excessive DORs and is working for consistency. He noted that in response to consolidation and concentration of assets in the system, NCUA is looking at creating a new division within the agency just to focus on the very largest of CUs. It is also seeking to try and streamline how it examines small credit unions.

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