WASHINGTON—NCUA Board Member Todd Harper addressed some of the top issues NCUA is addressing today, including the possible downsizing of the agency and consolidation of federal regulators, during the Defense Credit Union Council’s annual Defense Matters event here.
As CUToday.info has reported, both of those matters are being driven by the Trump Administration, which has called for all federal agencies to cut staff and has also discussed combining federal regulators.
Harper acknowledged the agency is looking at ways it may need to change as a result of the direction from the trump Administration to downsize, and essentially, reorganize federal agencies.
Harper explained that whatever course is chosen, NCUA will be focused on protecting consumers, their deposits and the share insurance fund from losses.
“I’m confident we will get through this with a strong NCUA—one that protects the independence of the credit union system.”
Harper addressed the possibility of a government shutdown within the next ten days.
“In times like these, those credit unions that are attached either to the Department of Defense or any federal agency have always been very good about providing liquidity to members—providing advanced paychecks,” Harper said, adding that if a prolonged shutdown happens and credit unions need liquidity they should turn to the Central Liquidity Facility.
Turning to the possibility of consolidation of federal regulators, Harper said NCUA is doing all it can to maintain the independence of the agency, stressing the importance of NCUA making it clear to the new Administration and Congress there is a distinct difference between credit unions and banks and that the oversight of both is not the same.
Harper emphasized that the new Administration must not view regulatory agencies as “one size fits all.”
In the past, particularly as the Dodd–Frank Wall Street Reform and Consumer Protection Act was being written, there have been efforts on Capitol Hill to try and consolidate regulators that have not succeeded, Harper noted.
He pointed out that NCUA today has a complex job.
“Our largest credit union is $181 billion in size and our smallest credit unions are under $100 million. If you would put NCUA into an entity that examines things of trillions of dollars in size…I'm very much worried about a one-size-fits-all approach getting developed and not understanding the nuances of how credit unions operate,” Harper said.
Finally, Harper addressed the possibility of credit unions losing their tax exemption, reminding that mutual savings and loans eventually lost their tax break. Harper stated that if the tax exemption is taken away, it will place a great deal of earnings pressure in the movement.