Excerpts from Chair Matz' Statement on the Risk-based Capital Rule:
"Confirming NCUA's Legal Authority:"
"Another issue that was raised during the comment period for the previous proposed rule on risk-based capital was NCUA's legal authority to promulgate this rule."
"This past summer ["while I was on vacation"] I solicited 11 law firms around the country that specialize in financial services statutes and regulations. I solicited the independent legal opinion in order to perform my own due diligence. I ultimately chose ... Paul Hastings, based in Washington, D.C."
Q: Does an NCUA Chair "while on vacation" normally solicit law firms independently for the Agency? Exactly what does "solicit" actually mean; how does one solicit a law firm while on vacation? Why did the Chair choose to solicit "11 law firms", as opposed to say 5 or 15? Does an NCUA Chair generally need to perform separate, individual "(my own) due diligence"?"In preparing the scope of work, I made it clear that I wanted their unbiased legal opinion on the issue, and that NCUA would not influence or pre-determine the legal opinion in any way."
Q: Does the NCUA normally alert prestigious law firms that the Agency will accept an "unbiased legal opinion"? Does the NCUA frequently attempt "to influence or pre-determine" outside legal opinions?"The oral legal opinion [from Paul Hastings] maintained that while certain parts of the Federal Credit Union Act are arguably ambiguous, it did support our proceeding..."
"While some lawyers may present conflicting opinions about NCUA's legal authority, the fact that there are different statutory interpretations clearly demonstrates that reasonable minds may differ on this issue. Even if the law is determined to be ambiguous, deference is given to the Agency ..."
Q: The Paul Hastings law firm solicited by NCUA determined and stated in the oral opinion that the FCUA is "arguably ambiguous"; so what does "Even if the law is determined to be ambiguous,..." mean?
"[The oral and written opinions cost $150,000.] I should note this is not a new budget request; it was paid in 2014 from our Office of General Counsel's line item for Contracted Legal Services."1Q: Did paying the $150,000 in 2014 make it somehow more appropriate or less costly? Since it was already a "line item" in the "budget" was concern reduced, because effectively it "had already been spent"?
"1" ... "Subsequent to the oral opinion, the firm provided a privileged, substantive written opinion. My statement during the open meeting on January 15, 2015 clearly and deliberately referred to the oral opinion. Regretfully, Board Member McWatters quoted directly from the firm's written opinion during the open meeting and in so doing, violated the firm's policy regarding the confidentiality of that opinion."
Q: How should the Agency punish the evil Mr. McWatters? Wasn't the opinion published on the NCUA website - less than 5 days later - on January 20, 2015?
Don't know about you, but after reading this...
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| 100 million American Credit union members deserve better than "arguable ambiguity"... Congress should write our laws. |
3 comments:
Would someone explain how Ms. Matz obligated the credit union industry for the payment of this $150,000 legal opinion?
I did not stay at a Holiday Inn or every want to disgrace my father's good name by becoming an attorney, but it looks like the opinion given my Paul Hastings has a lot of weasel words to kind of say that NCUA may have the authority but not necessarily.
QUESTIONS
Who are the other laws firms that were solicited?
Where they given a summary of the issue and asked to provide written information on their approach and cost estimate?
Will those documents be released?
Why did the Chairman assume the role of Solicitor when that is the job of the General Counsel?
What role did the GC play in this?
From whom did the Chairman get her call list?
What were the low and high end cost estimates?
Why didn't the Chairman consult with her Board on the hiring of the firm?
Did she consult one and not the other?
So many questions that have no answers.
Seriously, are you going to pay a law firm $150,000.00 for an opinion that does not support your position?
After serving on a board for 24 year and then 19 years as CEO and then 3 months back on the board, I dropped off the board because the majority of the board, the majority of which had 2 years or less, didn't like my challenges to the new policies and actions of the board . . . even to the point of making one cry. Since my experience was more intimidating than beneficial I thought it better to just resign. BUT a number of other credit unions jumped at asking me to join their boards, committees, and consult with them. BOTTOM LINE, I like the challenges between NCUA board members, it makes their actions more effective!
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