By Ray Birch
ALEXANDRIA, Va.—NCUA’s open board meeting Thursday is critical to the stability of federal credit union oversight, say Washington analysts, who add it’s uncertain how long the single-board-member structure will continue.
Geoff Bacino
They also indicate that any formal actions taken by Board Chairman Kyle Hauptman during his tenure as the sole board member may be subject to legal scrutiny.
Former NCUA Board Member Geoff Bacino thinks the meeting is needed.
“I think it's a very good idea for Chairman Hauptman to hold a board meeting this week,” said Bacino, who currently leads Bacino & Associates. “Dennis Dollar did it in early 2002 using an opinion by former General Counsel Bob Fenner. Bob was one of the best legal minds and thoroughly understood the Federal Credit Union Act. So, I have absolute confidence in his decision.”
Bacino said it's important for the business of regulating credit unions to continue even in uncertain times.
“Board meetings are an essential way to let credit unions know that NCUA is still working to keep credit unions safe and sound,” he said.
Hauptman ‘Absolutely Correct’
Dennis Dollar
Former NCUA Chairman Dennis Dollar agreed Thursday’s meeting is necessary, and looked back on the period in which he became the first to lead a single-member NCUA board meeting.
“As was the case when I held a NCUA board meeting when I was the only NCUA board member back in 2002, Chairman Hauptman is absolutely correct to hold the meeting and to establish that he will continue to do so until the board is fully filled again,” stated the principal partner at Dollar Associates based in Birmingham, Ala. “A federal safety and soundness regulator cannot put a halt on all of its essential activities because its board is down to a single member.”
Dollar noted that Congress created NCUA to regulate and insure credit unions for the good of their depositors and the American public.
“It is absolutely the right thing for Chairman Hauptman to lead the agency until there is a full three-member board complement in place, including holding board meetings, taking administrative actions, hearing appeals, overseeing personnel decisions, serving as the spokesperson for the agency—and even enacting or postponing regulations where appropriate,” Dollar said.
“I think Congress would expect the same thing from the FDIC, FTC, Federal Reserve or any other federal agency created for a specific purpose by Congress, just like NCUA, to fulfill that congressionally mandated purpose if their boards or commissions were down to a single member,” continued Dollar. “The appropriate and necessary role of governmental regulatory agencies does not stop, nor should it, because there are board vacancies— regardless of the reason for the vacancies.”
America’s Credit Unions Chief Advocacy Officer Carrie Hunt pointed out Thursday’s agenda is comprised of two board briefings.
“The NCUA won’t be taking any formal actions Thursday,” Hunt reminded. “It's important that the NCUA continues to operate, and informing the public of where they are with staff reductions and other things, including the Share Insurance Fund, are incredibly important. I'm glad NCUA is continuing to function.”
In addition to a quarterly briefing on the Share Insurance Fund, Hauptman Thursday will hear a report on NCUA’s Voluntary Separation Programs.
“Obviously, the NCUA has acted in the past with a single board member, and we have recognized that,” said Hunt, adding ACU supports Trump nominating additional members to the NCUA board. “Ultimately, this is an important issue, should that authority be challenged if the NCUA takes formal board actions.”
Essential To CUs Continued Strength
Defense Credit Union Council Chief Advocacy Officer Jason Stverak concurred that Thursday’s meeting is important.
“Stability in federal oversight is essential to the continued strength of our nation’s credit union system—especially those serving military and veteran communities,” he said. “While the situation remains fluid, moving forward with the board meeting is a step to maintain confidence, continuity, and regulatory integrity. Credit unions need confidence in their regulators during uncertain times. A strong and independent NCUA is vital to vibrant credit union industry in the future.”
Carrie Hunt
Hunt reminded the lawsuit filed against the Trump Administration by dismissed Board Members Todd Harper and Tanya Otsuka could impact future NCUA board meetings.
“The next couple of months will be very telling in terms of what the future of the board looks like,” Hunt said.
Hunt pointed out a great deal of discussion has been generated over NCUA having one board member.
“Certainly that is unique to the agency because it only happens once every 20 years,” she said. “But the NCUA board has functioned for decades under a lot of different nuances and scenarios, which is why we strongly support an NCUA board made up bipartisan members. What is happening right now at the NCUA, with the President removing the two Democratic members, is happening to other agencies.”
Single Board Member Constitutes A Quorum
Jason Stverak
Although NCUA has stated a single board member constitutes a quorum—and Dennis Dollar has backed that view based on his own experience—Brandy Bruyere, partner at Honigman, LLP, cautioned that while those perspectives aren't wrong, they shouldn't be seen as legally binding.
“When you look at the text of the Federal Credit Union Act, it is not as specific. There is a lot of gray area here,” Bruyere told CUToday.info in a previous report. “Therefore, if Chairman Hauptman were to take any regulatory actions on his own, as a sole board member, and a legal challenge followed, the outcome would be uncertain.”
Will a legal challenge arise if Hauptman takes any regulatory actions in future board meetings in which he presides as the sole member?
“Anyone filing suit is going to have to balance what they want that result to be with what it will cost them,” Hunt said. “Lawsuits, as we know, are expensive. If the bankers want to spend a whole lot of resources to strike down an action that will just be ratified again once the NCUA board is stable, I guess they certainly could do that.”
What’s next for NCUA board meetings, as the agency now lists all remaining 2025 meetings as “tentative” on its website?
“What is ahead is really hard to predict because we haven't seen the President nominate anyone else to the NCUA board,” noted Hunt. “Once we have a ruling in this first round of litigation (filed by Harper and Otsuka) relative to these cross motions for summary judgment, then we will have a better idea of what the length of time and course of litigation could look like. We will have to wait and see. I will note though that having boards that have fewer members than a formal quorum isn't new. In the past the FTC has operated for years without a formal quorum.”