Exclusive: Warren says NCUA deregulation weakens credit unions

• Key insight: Warren pressed National Credit Union Administration Chair Kyle Hauptman to turn over the legal analysis backing his claim that a single board member can constitute a quorum at the agency.
• What's at stake: Litigation over the legitimacy of the NCUA's authority with a single member will continue to shadow any deregulatory rules finalized before the board returns to full strength.
• Forward look: John Crews, who was nominated to replace Hauptman on the board, will now go before the full committee for what is expected to be a party-line vote. 

WASHINGTON — The National Credit Union Administration's deregulation project could undermine the integrity of the credit union system, Senate Banking Committee ranking member Elizabeth Warren, D-Mass., told the regulator on Monday. 

The NCUA is overseeing a growing and increasingly concentrated financial system, made up of institutions ranging from the tiniest community lenders to institutions that rival the midsized regional banks. The sector is overseen by the NCUA, which is meant to operate with a three-member board but has been operating with a single chair since President Trump fired two Democratic members in 2025, taking the agency into ambiguous legal territory. 

Warren reiterated her view — one shared by a host of experts and the ousted board members themselves — that the Federal Credit Union Act and implementing rules require the agency to have two members on its board of directors to have a quorum, meaning that decisions made with a single member would be invalid. The NCUA, for its part, maintains that it can govern with a single member, citing a 2002 precedent where a single chair ran the agency for two months. 

"This raises serious questions about the legitimacy of any Deregulation Project proposals and other actions that were taken by a single member," Warren said.

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Kyle Hauptman, to whom the Warren letter is addressed, has served as the solo chairman since his Democratic counterparts' removal last year. Treasury official John Crews has been nominated to replace him, and upon his replacement Hauptman said he will take a seat on the Public Company Accounting Oversight Board. Crews sat for a confirmation hearing in the Senate Banking Committee last Thursday and is expected to have his nomination pass with partisan support. 

In Monday's letter, Warren said that the NCUA's deregulatory project could threaten the stability of the broader credit union system. Among other proposals, the NCUA has floated eliminating the segregated deposit and collateral requirements and eliminating some nondiscrimination requirements. All together, the NCUA would repeal or scale back 31 rules, Warren said. 

"Taken as a whole, these rollbacks threaten the stability of the credit union system," she said. 

Compared to the banking system, the credit union system is considerably more lopsided, with a large number of very small institutions intermingled with a handful of comparatively big ones. Warren said that if one of the larger credit unions were to fail, it could hinder the ability of the NCUA's shared deposit insurance fund to insure deposits and the ability of the broader industry to recoup those losses. 

Separately, the fired NCUA members' legal fortunes were dealt a blow Monday after the Supreme Court handed down its decision in Trump v. Slaughter, in which the high court determined that principals of independent agencies are fireable at will by the president. But while the ruling casts doubt on the NCUA members' right to be reinstated, it does not address the issue of whether the NCUA can technically operate with its solo chair. 

Warren in the letter asks Hauptman to provide the legal analysis that determines if a sole board member constitutes a "quorum" and can enact policy changes.