Matz Encourages Regulators to
Help Credit Unions Reach New Markets
NCUA Board Member Focuses on Growth and Small CUs at NASCUS Conference
Sept. 14, 2004, Albuquerque, N.M. – State and federal regulators can help credit unions generate the membership growth they will need to protect their future safety and soundness, NCUA Board Member Debbie Matz told the National Association of State Credit Union Supervisors (NASCUS) Annual Conference.
“For all federally insured credit unions – state and federal charters combined – real membership growth is stagnant at about 2%,” Matz pointed out. “Between plants closing, businesses downsizing, and members who are aging, it’s safe to assume existing members will not be around forever. In order to thrive in the future, credit unions need to reach new markets.”
“New markets,” she explained, “are home to millions of potential members who are underserved by insured financial institutions, including ethnic groups with cultures unfamiliar to most credit unions. In fact, the fastest-growing ethnic groups – Latinos and Asian-Americans – are under-represented in credit union memberships.”
Matz advised regulators to encourage credit unions to consider multicultural marketing techniques and special services to attract underserved groups. She detailed the importance of services such as small loans, risk-based loans, volunteer income tax assistance, international remittances, financial education, member business loans, and affordable mortgages.
“These services not only increase membership,” Matz observed. “They build loan volume, spread risks, and as a result, strengthen safety and soundness.”
Matz emphasized that generating growth is especially critical to the survival of small credit unions – which are disappearing at a rate of one per business day.
“There is more that we can do if we, as regulators, recognize the importance of small credit unions,” Matz affirmed. “Small credit unions require a more tutorial approach. I believe we need to work together to develop approaches and reward efforts to assist small credit unions that have an opportunity to grow and thrive.”
For example, Matz related, “I hear compliments when our examiners recommend mentors, suggest training programs, explain the necessity for internal controls, and find small credit union partners for back-office assistance or loan participations. Help from examiners can mean the difference between life and death for small credit unions.”
By taking such actions, Matz believes regulators can help protect all credit unions from their greatest long-term safety and soundness threat: taxation.
“State and federal legislators who may be thinking about taxation expect credit unions to serve more constituents who are underserved,” Matz explained. “To many of these legislators, small credit unions are the icon of the credit union community because they tend to be located where there are no other insured financial institutions.”
As a result, Matz concluded, “By helping small credit unions survive, and encouraging all credit unions to reach new members in new markets, I believe regulators can make a difference in preserving credit unions’ tax exemption – which is critical to protecting safety and soundness.”
Recommended by Senate Democratic Leader Tom Daschle (D-SD), Matz was named as a recess appointee to the NCUA Board in January 2002 and nominated to a seat on the Board on February 27, 2002. The U.S. Senate confirmed her on March 22, 2002. As part of the NCUA Board, Ms. Matz oversees the regulation of federal credit unions and the administration of the federal insurance fund covering approximately 9,500 credit unions in the U.S.
A 24-year public service veteran, Matz is a member of three credit unions and resides in McLean, Va. with her husband and two children. Before her appointment to the NCUA Board, Matz was appointed by President Clinton as Deputy Assistant Secretary for Administration in the Department of Agriculture.
|
