WASHINGTON–The whipsaw reversal by the CFPB in its rules, regulations and enforcement under the Trump administration from the Biden administration could be an example of the future of NCUA and other regulatory agencies, depending on how the Supreme Court rules on cases now before it, according to America’s Credit Unions.
On Monday the Supreme Court has started its new session and among the cases it is considering is that of Rebecca Slaughter, who is challenging President Trump’s attempt to remove her as a commissioner of the Federal Trade Commission. That case is similar to that of fired NCUA board members Todd Harper and Tanya Otsuka, who have filed a petition with the U.S. Supreme Court requesting it grant certiorari before judgment in the case and to consider the case alongside Trump v. Slaughter, as the CU Daily reported here.
A 90-Year-Old Precedent
At the heart of those cases is the Supreme Court’s 1935 ruling in Humphrey’s Executor, which found the U.S. Constitution allows Congress to enact laws limiting the ability of the President of the United States to fire the executive officials of an independent agency that is quasi-legislative or quasi-judicial in nature. The ruling has been a well-established precedent for 90 years, but the Trump administration is strongly challenging it.
The Slaughter case is set for oral arguments in December.
“If the Supreme Court does in fact consolidate the cases and consider them in December, then we could very well see a quick decision sometime in early Spring and definitely by June of next year when the Supreme Court is slated to issue all of its decisions for the term,” Ann Petros, VP, policy engagement and credit union operations with America’s Credit Unions, said during a call with the media.
Reversing Course
What could change, however, is the direction, focus and regulatory hand of NCUA after 2028 should a Democratic administration be elected. Depending on the Supreme Court’s decision, a Democratic president could fire any Republicans on the NCUA board, install Democrats and, potentially, reverse the agency’s direction of the prior four years.
In response to a question from the CU Daily, Petros said the kind of “pendulum swing” and “regulatory whiplash” seen at the CFPB this year could be a very real event at NCUA and create the
“It would be obviously very frustrating to have a similar situation at the NCUA because the Federal Credit Union Act has established a three-member, bipartisan board, and that’s what we can support,” Petros said. “Anything less than that can frustrate the industry and potentially and make it more difficult for regulation and supervisory activity to move forward. We want clarity, stability and certainty for the industry.”
Petros said America’s Credit Unions has not yet decided if it will file a Friend of the Court brief with the Supreme Court in the cases in which it has an interest.
