The weekly recap features news on regulatory actions, mergers and other issues facing the credit union space. Send tips, ideas and chatter to email@example.com.
In the spotlight
Although word of a nomination to fill a vacancy on the National Credit Union Administration board was floated nearly four months ago, nothing appears imminent.
In June, President Donald Trump said he intended to nominate Republican Rodney Hood to the regulatory post. Hood was vice chairman of the NCUA board from 2005 to 2009. If confirmed, he would replace board member Rick Metsger, and so the board would still need a Democrat to fill former chair Debbie Matz's seat.
But former NCUA Chairman Michael Fryzel said in an interview that with the nomination of Brett Kavanaugh to the Supreme Court, the pending midterm elections and the atmosphere in D.C., Hood is likely "not going anywhere" until a Democrat is nominated for the balance of the Matz term. "It may be the end of the month or mid-November," he said. "Metsger will hang on until Hood is confirmed for his seat."
Currently, Metsger and Chairman J. Mark McWatters are the only members of the NCUA board.
Former NCUA board member Geoff Bacino said even though the Reid/McConnell "nuclear winter" means that nominees only need 51 votes, he believes that the Democrats want to pair their candidate with Hood. And because the White House has not signed off on the Democratic nominee, Hood's nomination is in a holding pattern.
"And if this session ends and no action has been taken, the nomination expires and would have to be re-submitted in 2019 when the next session of Congress convenes," Bacino said.
In other news
* The NCUA's McWatters, testifying before the Senate Committee on Banking, Housing and Urban Affairs on Oct. 2, said the NCUA is the only federal financial institutions regulator that does not have authority to examine and supervise third-party vendors, and Congress needs to rectify that. McWatters said credit unions are increasingly using service organizations and other third-party vendors to provide technology services amid the rapid growth of technology in the financial sector and growing cybersecurity risks.
* Lucy Ito, president and CEO of the National Association of State Credit Union Supervisors, said NASCUS supports the NCUA obtaining examination authority over technology service providers but added that deference should be given to the state authority to supervise vendors in states with existing vendor examination mechanisms in place. "As far back as 2001, NASCUS has supported limited NCUA authority over technology service providers," she said in a release. "Addressing cybersecurity threats necessitates a collaborative state-federal effort."
* Ten federally insured credit unions were subject to civil monetary penalties for filing late call reports in the first quarter of 2018, the NCUA announced Oct. 5. Eight of the 10 credit unions had assets of less than $10 million. One credit union had assets between $10 million and $50 million and one credit union had assets between $50 million and $250 million. All 10 had been late in at least one prior quarter. Twelve credit unions agreed to penalties in the first quarter of 2017.
* The Credit Union National Association and state credit union leagues are investing a record-breaking $7 million in support of "credit union-friendly" candidates for the 2018 midterm election cycle, CUNA announced Oct. 1. CUNA is backing seven candidates in the 2018 midterm election, including Sen. Claire McCaskill, D-Mo.; Rep. Bruce Poliquin, R-Maine; and Rep. John Culberson, R-Texas. CUNA said it has engaged in partisan communications for nine election cycles. The Credit Union Legislative Action Council, the federal PAC of CUNA, supported a 50/50 split between Democrats and Republicans in the November 2018 elections.
* Seven Republicans on the Senate Banking Committee wrote a letter to the heads of the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Securities and Exchange Commission, and Commodity Futures Trading Commission, urging them to make changes to the Volcker Rule. But Carrie Hunt, vice president of government affairs and general counsel for the National Association of Federally-Insured Credit Unions, said the Volcker Rule is a critical reform, and eroding protections of the rule will likely undermine financial stability. "It is the logical and essential response to the mantra of 'too big to fail,'" she wrote in a letter dated Oct. 5 to federal banking regulators.