Budget Intrigue at the NCUA, as Two Members Voice Opposition to Hood Plan

Two members of the NCUA board said Thursday they oppose the 2021 budget proposed by Chairman Rodney Hood, but only one of them may be on the board by the time the document is voted upon.

Democrat Todd Harper and Republican J. Mark McWatters said they would vote against the plan that was released by the agency this week. The board is scheduled to vote on the budget at its Dec. 17 meeting. Under most circumstances, those two votes would doom Hood’s plan.

However, the Senate may vote on the confirmation of McWatters’s replacement, Kyle Hauptman, the week of Nov. 30. That would mean that McWatters would no longer be on the board by the time the budget is considered.

Hauptman’s position on the budget plan is not known.

President-elect Joe Biden is likely to appoint Harper as chairman of the board after he takes office on Jan. 20.

At Thursday’s board meeting, Harper said that the agency is likely to need more examiners and specialists next year as the credit union industry deals with the economic impact of the coronavirus crisis.

He also reiterated his call for the agency to have a staff dedicated to conducting consumer protection exams.

“Consumers, regardless of their financial provider of choice, deserve to have the same level of financial protection, yet we do not adequately assess consumer compliance management systems or even basic compliance with consumer financial protection laws in most credit unions,” Harper said.

He added that unlike other banking regulators, the NCUA does not assign a separate consumer compliance rating to credit unions.

“To better safeguard consumers’ interests and ensure that the credit union system lives up to its commitment to serving members, we need to provide the resources to create an effective, dedicated program for supervising compliance with consumer financial protection laws,” Harper said.

McWatters did not discuss specific areas of the budget that he opposes.

“I have noted a number of expenditures that are simply not necessary or appropriate for a safety and soundness, consumer protection, prudential regulator,” he said. “Other proposals merely add a shiny and expensive new gloss to functions that we are already performing seamlessly within the agency.”

In December, Harper voted against the current NCUA budget because it did not contain his plan to increase the agency’s consumer protection staff.

At the time, McWatters said he was inclined to agree with Harper, but he voted for the budget, saying it was more important to have a spending plan passed by the board.