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Week ahead: All about NCUA

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It’s shaping up to be a big week for the National Credit Union Administration.

The regulator saw a shake-up shortly before Thanksgiving when board member Mark McWatters abruptly resigned from the agency. His absence leaves NCUA with just two seated board members as it heads into a public budget briefing, scheduled for 10:00 a.m. Wednesday. McWatters’ exit from the board came just one day after he said he would not support the current budget proposal, and board member Todd Harper has also indicated he will not vote for the budget as it stands.

Despite that set-up, a stalemate is unlikely – at least when it comes time to vote. Wednesday’s hearing will not include any board action, but the panel has traditionally voted on the budget during its final meeting of the year. With Kyle Hauptman, President Trump’s final nominee to the NCUA board, expected to receive a Senate confirmation vote this week or next, the board could be at full capacity by the time it meets on Dec. 17. Hauptman is a Republican, like Chairman Rodney Hood, and most observers expect he would be likely to support the budget.

With changes already underway at NCUA, a new Congress beginning soon and a presidential transition in the works, the National Association of State Credit Union Supervisors has reiterated its long-standing call for modifications to the NCUA board’s structure. Those include expanding the panel from three seats to five and requiring at least one member have experience working within the state-charter system.

“A board member who has served as a state credit union regulator would ensure that the state perspective is considered in the board’s deliberations, establish diversity of voices and better foster a robust dual charter system,” NASCUS President and CEO Lucy Ito said last week. “State-chartered credit unions represent 50% of all credit union assets nationwide. The majority of state-chartered credit unions are federally insured. Without at least one board member with state credit union regulatory experience, NCUA is prone to a federal credit union bias as both the chartering body for federal credit unions and insurer of both federal and state credit unions.”

Beyond NCUA, House and Senate lawmakers will be back in session this week and next wrapping up the lame-duck session. For credit unions, that means ensuring the Community Development Financial Institutions Fund remains solvent, along with the Community Development Revolving Loan Fund and other programs, according to the Credit Union National Association.

Lastly, President-elect Joe Biden formally nominated former Federal Reserve Chair Janet Yellen on Monday to serve as his treasury secretary, and credit union groups greeted the news warmly.

“The Treasury Department plays a key role in ensuring the American people get the economic relief they need to emerge from the pandemic better, stronger and financially sound, and credit unions remain a key part of the solution. We look forward to working with Ms. Yellen once she is confirmed by the U.S. Senate to provide our nation with the financial support it needs,” Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions, said in a statement.

The trade group noted that Yellen had annual meetings with the NAFCU board between 2012 and 2017, updating her on the industry and how various Fed actions impacted credit unions.