WASHINGTON—Count Todd Harper among those concerned credit unions could lose their tax exemption.
The former NCUA board member spoke at the Brookings Institution Thursday and touched on a number of matters impacting credit unions, including the tax fight.
Harper stated he is concerned about the possibility of CUs losing their tax status, addressing how some credit unions no longer adhere to their core, statutory mission of simply serving members’ needs. He stated CUs have an “identity crisis.”
“Credit unions, moreover, are in a tenuous position and facing an identity crisis,” Harper said. “There are those that maintain true to the statutory mission—serving the credit and savings needs of their members. But there are those who have pursued mega mergers, have national fields of membership, have large stadiums named after them, have redlined neighborhoods and more…Legislative support for credit unions is slipping.”
In the Brookings Institution interview that lasted more than one hour, Harper also addressed overdraft programs at credit unions and the future of CU regulation. He also touched on the “unlawful” firing of two-thirds of the NCUA board, addressing the pending lawsuit filed on behalf of himself and former board member Tanya Otsuka.
“We had a frank conversation about the unlawful firings of two-thirds of the NCUA board without cause,” Harper stated on his LinkedIn page.
The pending lawsuit is advancing in the court system. According to a court document, an expedited briefing of the case has been scheduled.
The document states, “The parties have agreed to the following briefing schedule: Defendants will file their opposition on May 7, 2025, and Plaintiffs will file their reply on May 12, 2025. The defendants must file their opposition to the motion by May 7, and the plaintiffs must reply by May 12.”
The document also states counsel for the government does not know whether the NCUA board meeting scheduled for May 22 will proceed as planned.
Test Case
Harper also suggested that his dismissal, along with Otsuka's ousting, might serve as a "test case" for the Trump Administration's attempts to exert influence over the Federal Reserve.
"I think they're chipping away so that they can get to the Federal Reserve Board," Harper said. "And if you get to the Federal Reserve Board and start removing individuals, that affects monetary policy," he said.
Defense Credit Union Council Comments
Defense Credit Union Council Chief Advocacy Officer Jason Stverak reacted to Harper’s comments Thursday.
“DCUC has been leading the industry in calls for a strong and independent NCUA going all the way back to our testimony in front of NCUA during their budget hearings,” Stverak said. “One of our primary points was the need for an independent agency to protect credit union interests, and this is something that we have carried on through numerous communications to Capitol Hill. We look forward to working with the NCUA and as it moves forward on behalf of not only in defense credit unions but the entire credit union movement.”
America’s Credit Unions Comments
Following Harper’s Brookings Institution interview, America's Credit Unions President and CEO Jim Nussle stated ACU has always supported an independent, bipartisan NCUA board to serve as a strong regulator for the credit union industry.
“That has not changed with the removals of Board Members Todd Harper and Tanya Otsuka, and we have asked the Trump Administration to nominate individuals to fill those vacancies,” he said. “At the same time, we are monitoring the litigation filed by Mr. Harper and Ms. Otsuka as we are all the legal issues surrounding the current board composition. We look forward to a strong, stable NCUA board as these issues get resolved by our executive and judicial branches of government.
“The credit union industry remains firmly committed to its mission of ‘people helping people,’” Nussle continued. “While some are trying to drive a wedge between large and small credit unions, it is not asset size, nor how credit unions spend their marketing dollars, nor the size of their field of membership that defines a credit union. Credit unions serve more than 142 million Americans—military members and their families, teachers, farmers, first responders, small business owners, Main Street America. They cure banking deserts when banks abandon communities. They ensure all Americans have access to safe and affordable financial products and services. Credit unions of all sizes ensure the safety and soundness and strength of the industry.”