The recent brouhaha involving the designation of NCUA BoardMember Rick Metsger as its vice chairman is a classic example offailing to do all the research required before rendering anopinion.

Chairman Matz, as she always does, asked if she had the authority to take certain action. In this case it was todesignate a board member to be vice chairman. She was told theCredit Union Act, while silent on the vice chairman position, gaveher broad latitude to make such a designation.

There is a reason why in the Credit Union Act there is nomention of a vice chairman position. That is because it was notcreated by an act of Congress, but rather by board action manyyears ago when they amended the NCUA rules and gave the authorityto designate a vice chairman to the entire board.

The argument that the act states, “The chairman shall determineeach board member's area of responsibility and shall review suchassignments biennially,” and therefore gives her the authority todesignate a vice chairman, is not legally sound since Congressnever intended it to be used to justify an office it nevercreated. The assignments and responsibilities it refers tohave historically been the chairman having each board member act asthe liaison to such groups as the Defense Credit Union Council,NASCUS and NeighborWorks America.

The real reason why the positionof vice chairman was created was strictly political. Thethen chairman did not have the support or vote of the other Boardmember of his political party so he reached an agreement with theminority member to designate him vice chairman, ensuring his voteand support on promoting the chairman's agenda.

The most recent activity was further complicated when it waspointed out that a rule existed which was specific on thedesignation authority. Unfortunately, the chairman was incorrectlytold the Credit Union Act trumped the rule and thereforeprevailed.

Such advice would have been accurate had the act containedlanguage relating to the appointment of a vice chairman. Since itdid not, the rule became the law and what it said governed anyaction to be taken.

The NCUA, however, persisted saying the chairman had clearauthority to designate a vice chairman. On the NCUA'swebsite, the vice chairman title was place under Mr. Metsger'sname, his picture outside the board room was taken down so the newdesignation could be added to it and a new name plate was ordered.Very efficient but slightly premature.

And then common sense began to prevail, as the news media andothers pointed out that the chairman cannot solely designate a vicechairman. There was the realization that the advice given to thechairman was incorrect and flawed. The NCUA then said thefull board would consider a designation as required by law. Theright move to correct a wrong.

As an aside comment about the individual waiting in the wings toaccept the designation when properly done, my former colleague andfriend, Rick Metsger, is without question eminently qualified tohold the position of vice chairman. The missteps made requiring theboard to now do it right, in no way reflects on his qualificationsand ability to assume that job. I applaud his posture and demeanorduring this unfortunate episode.

Perhaps to put this in perspective we need to look to ancientRoman history and follow the slightly revised quote, “Render untoCaesar the things that are Caesar's and to the board the thingsthat are the board's”.

Michael E. Fryzel

Attorney and former NCUA Board Member

Chicago