10 Questions We Would Have Asked NCUA Board Nominees

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Last week two new NCUA board nominees, Todd Harper and Rodney Hood, were questioned on the direction of the credit union industry by the Senate Banking Committee in their confirmation hearing. Banking Committee Chairman Mike Crapo (R-ID) quickly took up the issue of NCUA’s unique expense reimbursement policy, a policy recently highlighted in an investigative story in the Washington Post. Sen. Catherine Cortez Masto (D-NV) also inquired as to why NCUA was making up its own standard for commercial real estate appraisal requirements. However, other important questions regarding the mission creep and lack of oversight were not asked at the hearing, many of which would have given these important nominees a sense of where NCUA should focus some of its attention moving forward. Here’s what we would have asked:

  1. How do you plan on holding billion dollar credit unions accountable to their original mission of supporting people of modest means during a time where they seem to be competing for larger profits?
  2. Over the past few years, large credit unions swallowing smaller credit unions in mergers and acquisitions has become extremely frequent. How would you ensure small credit unions have a chance to compete and can continue to thrive in this type of market?
  3. In 2018, NCUA’s Share Insurance Fund booked losses of nearly $750 million due to the failure of credit unions that engaged in risky loan practices, such as providing credit to floundering taxi medallions in New York. How will you inhibit these unsound loans, protecting members and taxpayers?
  4. How will you regulate the way credit unions’ taxpayer-backed dollars are being used, since many large credit unions today employ marketing strategies similar to Fortune 500 companies, acquire banks, and provide million dollar salaries for CEOs?
  5. Why do you believe credit unions feel the need to grow at “no speed limits” despite their foundational common bond requirements, and how will you prevent that from becoming the industry norm?
  6. Will you support a continued role for the Consumer Financial Protection Bureau (CFPB) for credit unions despite pushback from your peers?
  7. What measures will you take to encourage the credit union industry to follow the Community Reinvestment Act requirements and provide more access to financial services to underserved communities, despite pushback from peers?
  8. Marketing agencies, banks, real estate firms, and other businesses are bought by large credit unions and then grandfathered into their tax status so that they end up not having to pay federal income taxes, as their industry competitors do. Do you think this is fair?
  9. What do you think about large credit unions advocating for a say in NCUA’s budget?
  10. In 2018 alone, there were more than 20 cases of fraud and embezzlement in credit unions across the nation. How do you plan on increasing oversight to prevent these crimes from happening?

Senators Crapo (R-ID) and Brown (D-OH) should be applauded for beginning this oversight of the industry through this nomination hearing. Congress has a responsibility to ensure credit unions are sticking to their original purpose in order to protect taxpayers from additional risks.

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