WASHINGTON–During his confirmation before the Senate Banking Committee, NCUA Chairman Todd Harper was asked what he thinks about expanding the NCUA board, as well as about NCUA's preparedness around cybersecurity and about climate change.
Separately, a new director of the CFPB has been confirmed by the Senate.
Harper, who is currently serving in “holdover” status on the board and who was among three people whose nomination is being considered by the Senate, was asked by Sen. Steve Daines (R-MT) about expanding from the current three-member board. Some have advocated for a five-member board, including NASCUS, which wants to see a state regulator as a permanent member of the board.
Harper, a Democratic appointee, responded to Daines’s questions by saying there are two sides to that issue.
“Certainly, a disadvantage of going to a larger board would be higher costs for that board and perhaps slowing down the process,” Harper responded. “On the flip side of that, though, it would create more voices at the table in order to have more informed decision making.”
Harper added that additional members to the board could change a structural defect that limits communications among board members.
“The Sunshine Act rules make it difficult for me to talk one-on-one with my fellow board members, because when you have a three-member board, two people talking together is a majority and you have to notice that,” he said, referring to publication of board meetings for public review in the Federal Register. “A larger board would facilitate the board-member-to-board-member interaction.”
Daines indicated he is supportive of an expanded board.
“Looking at the reality” of how many members the agency board has had since its creation, including four years with just two board members (Rick Metsger and J. Mark McWatters), Harper added, “There’s an argument for considering making the board larger.”
Any change in the size of the NCUA Board would require a change in the Federal Credit Union Act.
If Harper’s nomination is approved by the Senate, his term would run through 2027, with the Biden Administration saying he will remain chairman.
Other Questions Posed
Harper was also asked about the agency's cybersecurity practices, with Sen. Jon Ossoff (D-GA) asking if the agency is properly equipped to deal with current cyber-challenges and if it can adequately monitor CUs.
“One very big difference is that bank regulators have the ability to go in and see third-party vendors and the NCUA does not have that authority. So, it’s a blind spot for us and it’s a blind spot in fact that FSOC, GAO and our own Inspector General have asked us to close,” Harper said.
In addition, while many Republican senators have expressed opposition to federal agencies creating policies related to climate change, Sen. Tina Smith (D-MN) asked Harper what the agency and CUs are doing to mitigate related risks.
“Our focus on climate financial risk is really taking a look at all material risks,” answered Harper. “For some credit unions it may be that they are attached to a particular industry that are undergoing structural changes and that credit union may need to consider expanding its charter, becoming a multiple common bond charter.”
New CFPB Director
Separately, by a vote of 50-48, the U.S. Senate voted to confirm Rohit Chopra as director of the Consumer Financial Protection Bureau (CFPB). Chopra previously served as a Federal Trade Commissioner and at the CFPB where he was charged with protecting student borrowers from abuse and mistreatment as student loan ombudsman.
“NAFCU congratulates Rohit Chopra on his confirmation to serve as CFPB Director. Our credit union members have been at the forefront of helping consumers weather the financial impact of the pandemic,” said NAFCU President and CEO Dan Berger. “We look forward to working with Director Chopra to ensure that credit unions can continue to assist their members as the economy recovers from the impact of the pandemic. NAFCU will continue to advocate for an appropriate regulatory environment that allows credit unions to successfully serve their 127 million members.”
CUNA Statement
“We congratulate Mr. Chopra on his confirmation and look forward to engaging with him soon on credit unions’ track-record of providing consumer-friendly financial services,” said CUNA President/CEO Jim Nussle. “We hope under Director Chopra’s leadership, credit unions and the CFPB can work together to ensure consumers continue to have safe and affordable access to credit, financial products, and services provided by credit unions.”
CUNA said it continues to support legislation that would replace the single director of the CFPB with a bipartisan five-member commission, especially in light of the U.S. Supreme Court decision that found the director is removable at will by the president.