The National Credit Union Administration (NCUA) addressed concerns about the Trump administration’s decision to fire two of its three board members on April 18 in a message to the agency’s staff.
Following the dismissal of former NCUA chair and board member Todd Harper and board member Tanya Otsuka – the board’s two Democratic members – America’s Credit Unions President and CEO Jim Nussle noted the absence of at least two board members at the agency meant it would not have a quorum to take various actions.
The NCUA dismissed this concern, among others, asserting NCUA Chair Kyle Hauptman, a Republican, can act alone to enact new policies, based on a precedent established during the George W. Bush administration.
“It is the NCUA’s long-held view that a single board member constitutes a quorum when there are no other board members,” the agency wrote. “Chairman Hauptman and NCUA’s leadership are equipped with the required authorities to continue implementing the administration’s priorities and fulfilling our mission of protecting the system of cooperative credit and its member-owners through effective chartering, supervision, regulation, and insurance.”
The agency referenced the two-month period during which NCUA Chair Dennis Dollar served as the agency’s only board member after Bush removed Yolanda Wheat, a Democrat, from the board in December 2001. During that time, records indicate he commenced meetings, voted, and took several actions, both administrative and operational.
The NCUA addressed speculation about its ability to take such actions in its message to employees.
“The departure of two of our three NCUA Board members has led to speculation within the credit union industry and trade press about the NCUA Board’s ability to exercise authority with the presence of only a single board member,” the agency wrote. “Please be assured that the NCUA has precedent and standing delegations of authority in place to continue performing all operational and statutory requirements under the authority of a single board member.”
The Federal Credit Union Act (FCU Act) stipulates “a majority of the board shall constitute a quorum,” which has frequently been interpreted to mean the NCUA must have at least two board members to satisfy this requirement.
Appendix A to Part 701 of the Federal Credit Union Bylaws reference the need for “a two-thirds vote of the FCU’s board of directors” to approve changes to the bylaws, but no such numerical stipulation exists in the FCU Act, leaving the matter up to legal interpretation.
In a social media post following his ousting, Harper expressed his disappointment in the Trump administration’s decision to remove both Democratic board members and raised concerns about the implications for the agency’s independence.