Some Good Questions for NCUA Chairman Todd Harper

On Wednesday, the House of Representatives Committee on Financial Services will hold a hearing focused on “Oversight of Prudential Regulators: Ensuring the Safety, Soundness, Diversity, and Accountability of Depository Institutions.” Among other financial services regulators, the National Credit Union Administration Chairman will be testifying 

Traditionally these hearings focus on the important role of taxpaying banks, but we thought the Committee might ask a few questions of the NCUA as well. After all, many large tax-exempt credit unions, which were granted their tax-free status in order to focus on small means consumers, have continued their campaign to tilt the current unlevel playing field further in their direction.  

Some questions might include: 


Is it appropriate that large credit unions continue to buy tax-paying banks across the country and remove them from federal tax rolls?  Since credit unions are exempt from the Community Reinvestment Act (CRA), does NCUA consider the impact of these transactions on local communities? 


As regulators look to modernize CRA, shouldn’t they ensure all financial institutions, including credit unions are accountable for serving financially disadvantaged and under-banked people? If the core operating principle of the industry is “people and not profits,” doesn’t it make sense to ask credit unions to operate within CRA guidelinesOr, short of that, would NCUA support new legislation that would impose similar regulatory requirements on credit unions?  


Could allowing credit unions to issue debt to outside investors raise safety and soundness concerns?  Could it create a profit motive for supposed “not-for-profits”?   


Does expanding the powers of credit union service organizations (CUSOs) to allow unfettered and untaxed access to consumers mesh with the mission and purpose of the Federal Credit Union Act? CUSOs nearly brought down the credit union system during the financial crisis, yet NCUA still does not have the authority to supervise them. Does the NCUA support a bill currently pending in Congress that would give the agency authority to do just that? 


When it comes to credit unions ensuring consumer protections, what is NCUA doing to address the comments that its Chairman made earlier this year to an industry trade group: 

In 2020, NCUA examiners completed targeted reviews in all risk-focused and small credit union examinations to evaluate compliance with various consumer financial protection laws and regulations. The NCUA then performed quality control reviews on randomly selected examination reports. We observed several issues suggesting that some credit unions may not be paying attention to consumer financial protection as closely as warranted. 

These are just a few questions for the Committee to consider asking the NCUA Chairman as he attempts to regulate America’s credit unions.  

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