NCUA is finally on the hot seat, and it’s more than well-deserved. Senate Minority Leader Charles Schumer (D-NY) has taken notice of recent negative reports regarding the major lack of oversight at NCUA. These include a New York Times article after a 10-month long investigation into the agency’s role in the failure of taxi medallions and the NCUA’s Inspector General Office’s Material Loss Review. Sen. Schumer decided to call the agency out by sending a letter to NCUA Chairman Hood questioning the recurring “deeply troubling conduct.”
In the letter, Sen. Schumer examines how NCUA “worked to artificially inflate taxi medallion prices while hooking taxi drivers with reckless, exploitative loans.” He goes on to affirm that “as a result of these predatory practices, taxi drivers lost their life savings and were left with crushing debt once the market crashed and the value of these medallions rapidly decreased.”
Sen. Schumer also emphasizes that based on the sound reasoning of the Inspector General’s Material Loss Review, NCUA had many opportunities to prevent these problems for innocent taxi drivers, but failed to conduct quick and forceful oversight processes.
Now the ball is in NCUA’s court thanks to Sen. Schumer. He concluded his letter by requesting that NCUA respond to Congress with “changes to its supervisory practices” and that the agency determine whether it should “accelerate changes to the processes it is undertaking…including those related to concentration risk issues, examination quality control procedures, and annual examination scope requirement,” as recommended by the Inspector General Report. We commend Sen. Schumer for raising these concerns and holding NCUA accountable to making real changes from the results of these alarming reports, and we hope other policymakers continue to follow his lead. We’ll wait to see if NCUA is capable of real, effective progress – but we won’t hold our breath.
Read Sen. Schumer’s full letter here.