NCUA Board Member Fryzel's Remarks at NAFCU Congressional Caucus 2011

Uploaded by NCUAchannel on 02.12.2011


Good morning everyone, again.
It is my pleasure to introduce our next speaker.
He has a strong record of balancing
the operational needs of the credit unions
while maintaining strong supervision standards.
Board member, Michael Fryzel
was appointed to the NCUA board,
by President George Bush,
and he was sworn into office
as NCUA Chairman in July of 2008.
He held that position until August of 2009.
Mr. Fryzel was faced with great challenges
during his tenure as chairman.
With his leadership, we addressed
a deteriorating situation
involving corporate credit unions.
He proposed and put his own boots on the ground
in Capitol Hill to secure a passage
of legislation to aid the resolution
of the corporate situation
in implementing the corporate stabilization plan.
Also, early in his term
he addressed the severe liquidity problems
facing our industry and asked and received
from Congress the authority
to increase the borrowing authority
of the Central Liquidity Facility.
It is my great pleasure to bring to the stage,
board member Michael Fryzel.
Thank you, Carrie.
It is a pleasure to address
the NAFCU Congressional Caucus today.
As I have in the past, I want to again recognize
and thank Fred Becker, Michael Lussier,
Dan Berger, Brad Thaler and Carrie Hunt
for the outstanding job they do
representing and advocating
for credit unions across this country every day
in our nation's capital.
Your efforts and actions make NAFCU
the respected association it is.
And I commend and thank you
for all you do.
I am pleased to be speaking to you here
at the Mayflower Hotel.
It is sometimes referred to as
the Grande Dame of Washington hotels,
and it has garnered a notable reputation
since opening in the 1920s.
Quite a number of events have taken place here--
inaugural balls for nearly every
President since Calvin Coolidge,
daily lunches for Director, J. Edgar Hoover,
plus the coming and going of celebrities.
Franklin Roosevelt stayed here
the day before he was sworn in
for his first term as president.
It was March 1933.
Things could hardly have been worse.
The country had been suffering for three years
after the Great Wall Street Crash of October 1929.
Very little that the Herbert Hoover
Administration had attempted to do
could jump-start the American economy.
Unemployment stood at almost 25%.
There was no deposit insurance
and when banks failed, persons who had
a lifetime's savings in them lost everything.
Hungry men, women, and children
wandered the streets or stood in bread lines
to get food.
On the day Roosevelt stayed in here
in this hotel-- it was a Friday--
the worst banking crisis of those three miserable years
reached a peak: 32 states declared
bank holidays on account of failing banks.
Very likely, no first inaugural speech
since Abraham Lincoln's in 1861
was anticipated as Roosevelt's.
What was he going to say?
What was he going to do to attempt to elevate
the nation out of the worst
economic crisis in its history?
Upstairs, in Suite 776 of this hotel,
Roosevelt worked on that speech.
He had worked on it on and off for weeks,
but the night before the inaugural
he toiled over it again.
Some portions of that speech are worth recalling.
He began by very quickly saying within the first few seconds,
"This great nation will endure as it has endured,
will revive and will prosper.
So first of all let me assert my firm belief
that the only thing we have to fear
is fear itself."
These are the words most people remember
from that speech and they are the ones
most quoted, but there were more.
Roosevelt was harsh on the persons he felt
had contributed to the economic mess.
He said of them,
"They know only the rules
of a generation of self-seekers.
They have no vision,
and when there is no vision
the people perish."
He also said,
"The measure of the nation's restoration
lies to the extent to which
we apply social values more noble
than mere monetary profit."
And he said that:
"These dark days will be worth all they cost us
if they teach us that our true destiny
is not to be ministered unto
but to minister to ourselves
and to our fellow men."
These words still resonate today.
To me, they sound very much like
what credit union people have been saying
for the past 100 years.
Or this, which came
a little bit later in his speech.
He said,
"We now realize as we have never realized before
our interdependence on each other,
that we cannot merely take
but we must give as well."
Franklin Roosevelt spoke these words
to thousands of anxious people on the east side
of the Capitol where many of you
are headed this week.
That was nearly 80 years ago.
Times change, powerful people come and go,
but some human circumstances
remain remarkably the same age after age.
Franklin Roosevelt understood and tried
to tell the American people
that the way forward was not by chasing
after mere profit, but rather
by looking out for one another.
It was not by thinking about acquiring
but rather by thinking about helping.
Helping is exactly what you in this room do.
And my hope is that when you call
on the Representatives and Senators
and their staffers and federal officials
here this week,
you will remind them about what you do,
that what you do is help.
Remind them that credit unions
do not seek profit, but rather seek only
to deliver financial services to ordinary men and women
in a fair and beneficial way
and to offer financial education to them
so that their financial lives are made better
so that they can keep more of their hard earned money.
Remind them that not one dollar
of tax payer money went to save
a credit union or to pay
for an insured savings account.
Although not causing the problems
that have plagued our nation
since the credit crisis of 2008,
and in fact having been victimized by them,
credit union members have looked out
for their own people and their own system.
While you are at it, remind the officials
you will be talking to, that 30 years ago
credit unions hardly wrote home mortgages
at all, or business loans,
but that, all things considered,
credit unions have grown to being arguably
the best writers of mortgages
and best business lenders in America.
Given this record, should credit unions
not be allowed to make even more business loans
and to grow by means of alternative
or risk-based capital?
Some of you tomorrow night will be going to the Newseum
about a mile from here on Pennsylvania Avenue.
The Newseum celebrates the tradition
of newsgathering and dissemination
through the years of our nation.
When the men who wrote the U.S. Constitution in 1787,
including its first 10 amendments,
they did a very short and a very important thing.
They wrote that Congress should:
"Make no law abridging the freedom of speech,
or of the press."
In a single phrase they wiped away
a disease on good government
that had lasted thousands of years.
The disease was that anyone could be punished,
driven out of business, jailed,
or worse, for standing up
and saying that an action
of the government was wrong or that an agent
of the government was corrupt.
Freedom of speech in America
has always been troublesome,
but it is the best antiseptic
against inefficient, even self-interested,
No person in our nation can be punished
for pointing out inefficiency,
error, or corruption.
But there is more to the First Amendment
than freedom from fear of speaking the truth.
When a nation allows anyone to speak plainly,
all sorts of ideas are developed.
Some, of course, fall by the wayside
as not being particularly good.
But some rise.
In a nation that protects free speech,
good ideas are formed and then attract attention,
these ideas are debated, and the best of them
rise to the top.
Credit unions are one of those good ideas.
A hundred years ago, many ordinary Americans
were not getting the kind of credit
or the kind of financial services
they deserved.
Credit unions, at the time barely known,
were seen as an idea that could help these people.
Now credit unions help 91 million Americans,
almost a third of our nation's population.
Why did the credit union idea grow
from helping a handful of people
to helping 91 million Americans?
Because it was a good idea, and because it remains
a good idea today.
Credit unions give efficient financial services
and adequate credit to ordinary Americans
from coast to coast.
And credit unions give effective and sound financial education
with nothing else in mind than helping the persons
who come for that education.
Because we are a good idea we have grown successful.
Let's do a bit of comparison.
The number of Americans who watch Monday Night Football
is 15 million.
The number of Americans who watch American Idol
is 27 million.
The number of Americans who own smart phones
is 85 million.
But the number of persons served by the nation's
credit unions is 91 million
and counting, because more join every day.
We, the credit unions,
the trade associations, the NCUA,
now have to care for that success
carefully and respectfully.
And doing so requires that each of us understand
and does his job.
For my own part, I recall what Ronald Reagan
once said, "Government's first duty
is to protect the people, not to run their lives."
The job of NCUA is not to run credit unions.
Rather, it is to work to assure as best it can
the safety and soundness of the entire system
and to protect the integrity of the share insurance fund.
Accordingly, the credit unions
have to run themselves in a safe manner
in line with their pledge to put the best interest
of members ahead of all other concerns.
And the trade associations have to continuously strive
to improve the system for their member credit unions
and all credit unions.
We each have our jobs to do, and we each have to do them well
and in coordination with one another,
without overlap but with cooperation.
I can report to you that we are
getting on with that job.
But we have had some very hard shocks,
but we, and by that I mean
the credit unions, the trade associations,
and the regulatory bodies, have been dealing with them
fairly well.
We proved not to be a dry branch that snapped,
but rather a living tree that sways in a hard wind
but comes back to vertical again.
We have been flexible, and we need to remain flexible.
I believe the methods for full and complete recovery
are now in place and that what is important
is for us to be vigilant and to let the methods
for recovery work as they are intended to work.
Credit union reputation among the general population rose
after the Wall Street and banking problems
of 2008-2009 and that reputation
is continuing to rise.
Delinquency and charge-off rates have been falling.
Balance sheets are improving.
We all have to make sure that this forward momentum continues
and that we never slacken in our commitment
to assure that the credit union system
is the best financial services system
in the nation.
Although things appear to be slowly getting better
and we are hopeful that the worst
is behind us, and that the horizon
is brightening, we are not yet
in the clear and we still have
some tough days ahead.
Unemployment is too high, too many mortgages
are underwater, and there is
too much uncertainty concerning how
the nation and the world's
financial affairs are going to play out.
But we in the credit union movement have set into place
the needed processes for putting our problems
behind us.
Now with diligence, we have to watch
as those processes do the job
they were put in place to do.
We must wait and be patient.
Mark Twain liked to joke that when Congress
is in session, no person is safe.
Indeed, Congress can be fickle
and it can be frustrating.
But when you go to Capitol Hill this week,
remind the people you see there that very likely they,
or plenty of persons around them
are members of the Senate Federal Credit Union
or the Congressional Federal Credit Union
and that they benefit day in and day out
from the high-quality, low-fee services
of these fine institutions.
Remind them that what they receive from these
Capitol Hill-related credit unions
is repeated 91 million times
from the Atlantic to the Pacific
and from Texas to North Dakota
and that the good works that credit unions do
needs to be fostered and expanded
rather than hampered and confined.
I expect you will receive warm welcomes in any office
of government you visit.
You have my very best wishes for educating yourselves
in workshops here and educating government
representatives this week.
Again, thank you for inviting me,
and thank you for listening.