The first question of the pair’s hearing related to a recent expense scandal involving NCUA Chairman Mark McWatters and his chief of staff, Sarah Vega
. Sen. Mike Crapo, R-Idaho, asked whether or not Harper and Hood would reevaluate and consider updating the agency’s current expense-reimbursement policy. Both said they would.
One of the themes that cropped up throughout the testimony was consistency between various federal agencies. Geoff Bacino, a credit union consultant and former NCUA board member, suggested it’s reasonable to assume the next board would try to bring its policies more in line with other regulators. Part of McWatters’ defense in that scandal was that some of his expenses – in particular transportation costs – arose because NCUA doesn’t have the same services other regulators do, such as dedicated drivers, Bacino said.
“That might force NCUA to say, ‘We looked at the other agencies, here’s what the salaries for their drivers are, [so] we’re going to factor that into the budget in terms of Uber and cabs,’” he said. “If you did that, [expenses for cabs and ride shares] would pale in comparison to having an on-staff driver.”
Ryan Donovan, chief advocacy officer at the Credit Union National Association, pointed out that while the scandal made headlines just last month, the NCUA Inspector General issued its report last summer.
“What we’ve seen from the agency since the release of this report is there was some action taken later in the summer to clarify some of the policies and procedures,” he said, adding that while the new board might reexamine those rules, “the report does a pretty good job of laying out pretty fairly what the issues and concerns were.”
Carrie Hunt, executive vice president and general counsel at the National Association of Federally-Insured Credit Unions, noted that while both nominees pledged to examine and update the program, “based on the IG report and other things, it certainly looks like NCUA has already gone ahead and taken care of what they need to take care of. I’d be surprised if any additional changes are needed.”
When news of the scandal broke last month, many in the industry were hesitant to speak out on it. One reason for that may have been a general consensus that overall the industry is happy with McWatters’ actions on the board.
“From a macro perspective, the budget has been heading in the right direction for the last few years,” added Donovan.