WASHINGTON–America’s Credit Unions acknowledges it is as uncertain as anyone over what the firing of two NCUA board members might mean for the future of the agency and credit unions, although it has been able to flesh out some additional answers to the questions the move by the Trump administration has raised.
The trade group has assembled a detailed FAQ on everything from what the Federal Credit Union Act says about removing board members (it doesn’t’) to whether a one-person board constitutes a quorum (it also doesn’t say) to the likelihood of the consolidation of banking regulators (America’s CUs said it is heartened by statements by the Treasury secretary that a combo is not in the plans).
The Q&A, which has been updated since it was initially released, can be found here.
The CU Daily reported on the firing by the Trump administration of board members Todd Harper and Tanya Otsuka here and here.
Monitoring the Situation
The trade group says it is continuing to monitor the situation, as are so many others. America’s Credit Unions said it plans on doing a coordinating call with the respective state leagues as it also does more research and updates its FAQs.
A webinar with member credit unions is also in the works.
During a call with the media America’s Credit Unions’ president and CEO, Jim Nussle, said one thing the trade association has discovered since publishing the FAQs is that in 2001 the chairman held a board meeting as the lone member of the board. There has been debate over whether a one-person board constitutes a quorum.
“I guess technically it is no longer unprecedented; there is a precedent even though it is unusual,” said Nussle. “But a one-member meeting may bring all sorts of challenges.”
What Credit Unions Want to Know
What is America’s Credit Unions hearing from its member CUs following the removal of the two NCUA board members? According to Nussle, “Uncertainty would be the first thing. Typically in financial services and credit unions, we like certainly, we like predictability, we like consistency, we like to know how to manage our risks going forward.
“Having an independent regulator managing the safety and soundness of the industry is something we have grown to count on,” Nussle said.
In terms of America’s Credit Unions biggest concern with the current scenario, Nussle said it’s “making sure that we can provide certainty so that our members know how to think about the future, think about managing their risks, think about their next exam cycle, think about complying with regulations, etc.”
No Contact With Chair
Nussle said he and America’s Credit Unions have not attempted to contact NCUA Chairman Kyle Hauptman, explaining his time has been filled with gathering information. Nussle recommended the media turn to Hauptman’s office for comment.
“Certainly, we are interested in any official comments that come from the NCUA at this point in time,” Nussle said. “His official stance on everything at this moment is intuited.”
Nussle said he has had a good relationship with the NCUA chairman and in the past has communicated directly.
Not Taking Sides
Asked which is more important—maintaining the tax-exempt status or protecting the independence of the agency—Nussle said he would not choose one over the other.
“My general opinion has been both are very important and that’s why I led the call with (talking about) having an independent regulator and ensuring that we have a full contingency of board members to ensure that consistency and certainty is paramount. It’s the reason we’ve reached out early to the White House and the Treasury secretary. I was very heartened to hear him say that consolidation of the federal financial services regulators was something—I believe he used the word—was opposed to.”
What to Watch
Asked for his views on what is the most important thing credit unions should be watching right now, Nussle, a former member of Congress, pointed to the tax bill the Republicans are attempting to get through Congress and what “offsets” it will include—in other words, will the credit union tax exemption be nixed in order to “pay for” the extension of the tax cuts.
Nussle said that while he is “unsure” how credit unions could do any more in advocacy with Congress right now, some CU leaders have told him there is more than can still be done.
The Crystal Ball
Pressed for his forecast for the coming days and weeks, Nussle said it’s a question he’s been giving a great deal of thought.
“Let me preface it by saying I didn’t know this was going to happen, so that’s how good my crystal ball is,” said Nussle, who has announced his retirement pending the hiring of a successor. “I mean we certainly knew there would be a change or suspected that there would be a change. This was happening in other agencies but the timing of that is certainly not something that anybody really predicted.
A Lot of ‘Hopes’
“First and foremost, I think they’re more ‘hopes’,” Nussle continued. “I would hope that we get better clarity on how the NCAA believes they can and will proceed. I think that would be very helpful. We can speculate, we can research the precedent…but it may not be meaningful in the current very litigious circumstances and environment we find ourselves in. The nominations process would be another question I would have. The industry has not had a great track record in being able to influence that process. The last couple (of appointees) were former congressional staffers. It seems the only way you can get through a nominations process today is to know one of the senators. Again, I’m not sure that’s the best way to choose nominees, but again that’s something to think about.
“My mind also quickly goes back to what I know will be a Ways and Means process that will heat up as soon as the Congress gets back from recess in a little over a week,” Nussle said. “I served on the Ways and Means committee so I know what staff has have been up to. I know certainly what our grassroots have been up, to talking to members as they’ve gone home to their districts.”
In thinking about the future, Nussle acknowledged he is unsure what the “next phone call” might bring.