WASHINGTON–The firing of two NCUA board members has raised countless questions among many in credit unions. But the answers to those important questions are, at least for now, murky or unknown.
Among the biggest issues being debated in the wake of the unprecedented firing by the Trump administration of Todd Harper and Tanya Otsuka, the two Democrats on the NCUA board, is the legality of the move. As the CU Daily reported earlier, the administration also fired Democratic commissioners at the FTC, which has since led to litigation. In the case of credit unions, the question is what does the Federal Credit Union Act say? The answer is it doesn’t say exactly, lacking any provisions about such removals and leaving it open to interpretation.
There is also no express “for cause” language in the Act.
During the NACUSO Reimagine Conference, several people who were on hand who are attorneys suggested they believe the firings are illegal, but also stressed it was just their opinions.
It is unknown whether Harper and Otsuka plan to fight their removals in court, or whether, perhaps a third party may take up the cause for them.
NCUA moved from a single administrator to a three-person board in 1978.
What Makes for a Quorum?
A second big question: With NCUA Chairman Kyle Hauptman the only remaining board member, can any business be conducted? Many have suggested all rulemaking will come to a halt, because the board lacks a quorum. But others have suggested Hauptman could declare himself a “board” of one, and argue that he is the quorum.
NCUA Merged Into FDIC?
The firings have also created a lot of worry in credit unions over whether NCUA will be swept into the Treasury department or even merged into the FDIC. But as the CU Daily recently reported, Treasury Secretary Scott Bessent indicated he would not favor such a move.
Moreover, such a consolidation would also require laborious and time-consuming efforts to make changes to the FCU Act, the National Bank Act, the Federal Reserve Act, and other laws.
As the CU Daily also reports separately, one former state regulator has also provided a number of ground-level, pragmatic reasons such a merger is unlikely.
The CU Daily will have ongoing coverage.
