Could Supreme Court fight scuttle NCUA board nomination?

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It’s increasingly unclear when — or even if — Kyle Hauptman will receive full Senate confirmation to the National Credit Union Administration board.

Hauptman, who would replace board member Mark McWatters, was nominated in June, went through a confirmation hearing in July and had his nomination moved out of committee in August. But most Senate business is done until after the election, and Democrats are up in arms over the GOP’s push to confirm a new Supreme Court justice before the election.

Because of that, Hauptman is unlikely to be confirmed before the Nov. 3 general election.

“The obvious complication is Ruth Bader Ginsburg’s death and what that’s going to do to the Senate confirmation calendars,” said John McKechnie, a credit union consultant and former staffer at NCUA. “If things weren’t already volatile and hostile enough, they’re about to get even more so.”

McWatters has pledged to stay on at the agency until a successor is sworn in.

Ryan Donovan, chief advocacy officer at the Credit Union National Association, suggested that the confirmation process — and particularly how that process is scheduled — is “one of the more opaque parts of policymaking.” Rather than taking nominations one by one with floor debate, he added, lawmakers “try to package nominations like this with a group of similar-level nominations and get them through the Senate by unanimous consent.”

That means nominations across a variety of sectors — including those unrelated to financial services — could be combined in order to move through a wider swath of appointees.

“That’s where we’re at at this point is what type of package [Hauptman’s] nomination might fit into,” said Donovan. “Since it’s a nomination to a multimember board that’s got members from both parties, it would be reasonable to expect he’s going to be in a package that includes Democratic nominees to boards of similar size or stature.”

Adding to the murkiness of the situation, a pair of nominees to the Securities and Exchange Commission who had confirmation hearings along with Hauptman have already been seated. Some have questioned whether Hauptman’s confirmation is being blocked behind the scenes. While there is no clear evidence that’s the case, he butted heads with Sen. Sherrod Brown during his confirmation hearing. The Ohio Democrat questioned the nominee’s credentials and suggested he’s more qualified to be a credit union member than a regulator.

The fight over the Supreme Court nomination has raised the possibility that it could be harder for Republican and Democratic leaders in the Senate to cut deals to move nominations across the finish line.

“Through no fault of his own, [Hauptman] is going to get caught up in this battle between … the Republicans and Democrats. His nomination could be a casualty of this Supreme Court fight,” said Geoff Bacino, a credit union consultant and former NCUA board member. “This basically could force [Senate Minority Leader Chuck] Schumer to pull out all the stops to keep any executive-branch nominations from going through as really the only way to show Democrats’ displeasure over [Amy Coney Barrett’s] nomination.”

While an NCUA board seat is a relatively minor position, Democrats are also likely aware that if Hauptman is confirmed, Republicans will have the majority on the panel until at least 2023. Board member Todd Harper, a Democrat, could be elevated to the chairmanship under a Biden presidency, but his term at the agency expires next year, meaning there likely won’t be a second Democrat nominated until Chairman Rodney Hood’s term expires in 2023. Harper has advocated for the board to take a more active role in consumer protections, a key issue for Democrats, and similar measures could easily be blocked by a Republican majority on the board if he takes the gavel from Hood next year.

So what happens next?

Most observers say the overwhelming likelihood is that Hauptman eventually gets confirmed, probably in the lame-duck period after the election. If Republicans lose the White House and especially the Senate, many said, there will be even greater impetus for them to get as many Trump appointees in place as possible before losing power.

If the Democrats head into 2021 with control of the White House and both chambers of Congress, Bacino said, “I think it will really set off a panic [among Republicans] of, ‘What the hell are we going to do now?’ They almost need to set things in motion so the next two years are not a barren wasteland for the Republican Party.”

Donovan noted that in some cases NCUA confirmations have taken as long as six months, and the speed of Hood and Harper’s confirmation last year is the exception rather than the rule. They had confirmation hearings before the Senate Banking Committee in February 2019 and were confirmed one month later.

Hauptman’s nomination will expire when Congress adjourns in December, leaving the slim possibility that President Trump could seat him in January as a recess appointment

“I don’t know if I would put anything past this administration in terms of trying to get what they want,” said Bacino, who himself was a recess appointee. “A recess-appointment scenario is probably the last far-fetched thing I could think of, but I wouldn’t say it’s impossible.”

Regardless of what happens on Nov. 3, lawmakers still have five weeks to confirm nominees. While sources said it’s not unthinkable that his nomination could expire, the likelihood is that he’ll eventually be confirmed, just later than expected.

“Senate staff are only saying that Mr. Hauptman’s nomination is in the queue, and beyond that aren’t speculating about when he may be voted on,” said McKechnie. “That sounds indefinite, but in Senate parlance, it really isn’t. The Senate works in mysterious ways.”

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