WASHINGTON CUNA is urging Congress to expand the NCUA Board from its current three members to a total of five and to lift prohibitions meant to keep the credit union regulator from getting too cozy with credit unions a provision allowing only a single member to have recent credit union experience.
Under CUNA’s proposal, being made in regulatory relief testimony to be delivered at this afternoon’s hearing before the House Financial Institutions Committee, one of the additional two NCUA Board seats would be reserved for a representative from state chartered credit unions, which make up more than a third of all federally insured credit unions who are nominally regulated by NCUA. State chartered credit unions, which are regulated by their states, have long chafed over NCUA’s reach into their supervision by virtue of their federal deposit insurance, which NCUA oversees.
CUNA's request comes as credit unions are waiting to see who President Obama will nominate to fill one vacancy on the three-member panel, with another vacancy opening up in August. Unless one or two nominees are confirmed by the Senate before then a dubious prospect there is the specter of a single sitting NCUA Board member. With a five-member board that scenario is very unlikely.
Under the current system, each member of the NCUA Board serves a staggered six-year term. Two members of the board generally are appointed from the same party. No more than two members can come from the same party.
The prohibition on members being recently from the credit union movement has been debated in recent years, even while the last three NCUA Board members all had long careers in credit unions.
The restriction on having a single member with recent credit union experience was enacted by Congress as part of HR 1151, the 1998 CU Membership Access Act, because of worries the NCUA Board would be “too close” and thus compromised by the credit unions it regulates. Some of these concerns were raised during the corporate credit union crisis, when one of the sitting board members, the since-departed Gigi Hyland, was a former lobbyist for the corporates and later a general counsel for one of the failed corporates, Members United Corporate FCU. Hyland later voted on the conservatorship and liquidation of the failed corporate.
CUNA notes that no such restriction exists for members of the FDIC Board.
