Hearing on Pending Nominations


Prepared Statement of Mr. Michael David Scott
Member - Designate
Board of Directors of the National Consumer Cooperative Bank

2:30 p.m., Thursday, October 3, 2002 - Dirksen 538


Chairman Sarbanes, Senator Gramm, distinguished Members of the Committee, it is an honor and privilege for me to appear before you today as the President's nominee to be a Member of the Board of Directors to the National Consumer Cooperative Bank (NCB).

Before I begin my statement, I would like to thank my wife, Janet, and my children, Zachary and Taylor. Without their understanding, patience and support, I could not be here before you. Unfortunately, they are not able to be here today as they continue to live in North Carolina until we sell our home.

I would also like to thank Under Secretary Peter Fisher, Assistant Secretary Brian Roseboro and Deputy Assistant Secretary Roger Kodat for all of their support. Finally, I would like to thank President Bush for the honor of this nomination and the opportunity to serve.

I am, and if confirmed will continue to be, the Senior Advisor to the Deputy Assistant Secretary for Government Financial Policy at the Department of the Treasury. Prior to serving in the Administration, all of my previous experience has been in the private sector. I have worked extensively in finance, capital markets, investments, corporate strategy, financial analysis and commercial lending.

It is my current and former experience that I believe will enable me to be an effective contributor to NCB's Board. NCB plays a vital role in meeting the underserved needs of America's cooperatives, which range from housing cooperatives to affordable housing communities to small businesses to Alaska Native Corporations and Tribal Entities. I hope to bring constructive ideas to the Board that will help grow NCB in the important sectors that it serves. Additionally, I am keenly interested in NCB's capital structure and assisting it in addressing the statutory repayment of the Class A Notes that the Federal government holds, and that mature in 2020.

NCB is a multifaceted financial services company that enables cooperative endeavors throughout America to grow and succeed. These businesses are large and small. They serve rural and urban communities. NCB helps them by crafting financial solutions tailored to their individual needs, and the needs of their members. Chartered by Congress in 1978, NCB was privatized in 1981 as a cooperatively owned financial institution. Currently, NCB is owned by 1,841 of its customers.

NCB's capital base is funded by long-term subordinated notes; medium-term notes and commercial paper; loans from its banking partners and customers; deposits through its subsidiary, NCB FSB; and stock purchased by NCB members. The Bank's medium-term notes and commercial paper carry investment grade ratings.

NCB's primary lines of business include: multifamily and commercial real estate; commercial and small business banking; community development services; and personal banking.

  • To date, NCB has provided more than $6 billion in financing.
  • Combined with balance sheet assets and letters of credit, NCB now manages more than $3.6 billion in assets nationwide.
  • NCB reported a profit of $14.6 million for the first six months of 2002.
  • In early September of this year, NCB distributed approximately $12.6 million in patronage dividends to its member-owners in the form of cash and stock.
  • Last year alone:
    1. The Bank grew its deposit base by 50 percent, further diversifying its funding sources and lowering the capital costs for its customers.
    2. The Bank received reaffirmation of its investment grade ratings by Moody's (Baa1) and Standard & Poor's (BBB).

    NCB has a distinguished history of serving the cooperative community and I believe that its future is extremely bright. I would appreciate your support so that I may be able to contribute to its future. In closing, I would like to take this opportunity to thank you, Mr. Chairman, and the Committee for the prompt consideration of my nomination. Mr. Chairman, if confirmed, I commit to you, the Members and the NCB, all of my energy to serve with distinction and honor. I would be delighted to answer any questions you and the other members of the Committee may have. Thank you.

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