Much has been said and reported on during the first month of the Trump Administration’s barrage of Executive Orders, which have signaled big and even bigger changes happening to the federal government. But there was something different about Tuesday’s somewhat surprising Executive Order (EO) signed by President Donald Trump, which announced all federal agencies, including the NCUA, must be accountable to the Executive Branch, instead of being independent as Congress established years ago.
The NCUA has been functioning as an independent regulator since 1970 as part of the Federal Credit Union Act. Congress tasked the NCUA with promoting stability, transparency and consumer protection in the credit union space while ensuring access to financial services for millions of Americans. The NCUA was also given the independent power to charter, regulate and supervise federal credit unions while also protecting the financial interests of credit union members.
With Trump’s signing of the EO, that independence of the NCUA appears to be fading.
It’s normal for the NCUA to follow many EOs signed by presidents, at least on a voluntary basis. But this new EO “goes a step further" and "pushes the envelope” of what’s considered appropriate, according to legal and credit union experts CU Times spoke with on Wednesday.
Henry Meier, Esq. with The Law Offices of Henry Meier, Esq. and formerly with the New York Credit Union Association, said this particular EO is very different from EOs of the past.
“What makes this one so unique is that it goes one step further. It not only says, you’ve got to submit the material to us. It says that under this Executive Order, everything you do as a regulatory body is subject to the oversight of the Director of the Office of Management Budget, and then ultimately has to be conforming with the direction of the President of the United States,” Meier said.
What does this all mean for credit unions today?
“In terms of its practical impact on credit unions, it remains to be seen,” Meier said.
Meier added, however, that there are important changes credit union leaders should be aware of right away.
“But from a regulatory and lobbying standpoint, given the fact that we have a president who is committed to cutting down a number of regulations, and that this is one more step that NCUA is going to have to take in order to get regulations promulgated ... This is clearly yet another signal that we are about to see a real decrease, most likely, in any type of regulations.”
Meier said, “It also means that we have another level as an industry that we have to address in terms of who we lobby and the type of arguments we make and who we make them to. So the most immediate thing for credit unions on a practical level is that it creates another layer of oversight by the Executive Branch that will most likely, but not necessarily, slow down the volume of regulations.”
Of Tuesday’s EO, Geoff Bacino, partner at Bacino & Associates and former NCUA Board member, raised his concerns.
“The idea of ‘independent’ agencies should mean that they are just that … free from interference from any source,” Bacino said. “One of the takeaways from the Keating Five case was the need to have agencies not be influenced or dictated by members of Congress. To have true accountability, the agencies should remain out of the scope of any outside influence. This is why most agencies have a majority of Board members that are of the same party as the President.”
The “Keating Five Scandal” or “Keating Affair” occurred during the U.S. savings and loan crisis of the 1980s and involved five Senators accused of pressuring the Federal Home Loan Bank to rule favorably for Charles Keating, Jr., who was later sent to prison for his fraudulent management of Lincoln Savings and Loan Association.
There are a lot of things yet to be known about the future of the NCUA. But this EO, according to experts, is a challenge to Congress to enforce existing laws and the budgets concerning the independent agencies, like the NCUA. If Congress fails to do so, it will be up to the courts.
What has the NCUA said about these changes ordered by President Trump?
“The NCUA is reviewing the Executive Order,” an NCUA spokesperson said.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
