ALEXANDRIA, Va.—Former NCUA Chairman Dennis Dollar says the removal of both democratic NCUA board members before their terms are up is “unprecedented” and may spark a legal battle.
Dollar told CUToday.info that President Trump has proven he is not afraid to plow new ground to get his regulatory agenda in place.
“He presently did the exact same thing at the Federal Trade Commission,” said the principal partner of Dollar Associates, based in Birmingham, Ala. “That case will be fought out in court, as this one may well be if Mr. Harper and Ms. Otsuka have the will and the resources behind them to fight a presidential action no matter how unprecedented. Who will win? Time will tell, but it reinforces the prediction I have made recently in my industry presentations that there is certainly going to be less activist regulation from NCUA upcoming over the next few years.”
Dollar said at the very least the board makeup will be in flux.
“And it’s hard to enact new regulations with the validity of board actions in question,” he said. “It has always been my understanding, historically, that a president cannot remove a Senate confirmed board member before his or her term is up. That is what makes these boards independent.
Reversing Long Held Precedents
"That said, I was also always under the understanding that a sitting board member could not be renominated for a second term until the Biden Administration reversed established precedent and renominated Mr. Harper for a second successive term a few years ago,” Dollar added.
Dollar emphasized precedents have fallen now under both the Biden and Trump Administrations.
“Will this make the regulatory agencies like NCUA less independent? Probably. Is that a good thing or a bad thing? I guess the last two presidents have proven they want the regulatory agencies carrying out the philosophy of the White House that wins the last election,” stated Dollar. “Elections impact things in Washington. Time will tell what approach wins out long term.
“Both of these are unprecedented actions that both Biden and Trump each took,” concluded Dollar. “The results, if they are sustained in court or if they are not, will unquestionably impact regulatory actions and the regulatory environment going forward.”