Bacino: Turmoil at the top means leadership vacuum for NCUA
Former National Credit Union Administration board member Geoff Bacino writes that the agency effectively has its hands tied until the makeup of the board is resolved.
In a dramatic series of legal and political twists, the leadership of the National Credit Union Administration is now hanging by a thread, threatening to paralyze the federal agency that oversees the nation’s credit unions.
In the latest issue of his “Bacino Report” newsletter, credit union consultant and former NCUA board member Geoff Bacino writes that the regulator is entering unmapped waters.
On July 23, U.S. District Judge Amir Ali ordered the immediate reinstatement of Todd Harper and Tonya Otsuka to the NCUA Board, just ahead of a scheduled board meeting. Harper participated via video while Otsuka attended in person. But the following day, a federal appeals court granted the Trump administration’s emergency stay, effectively removing both officials once again, pending appeal.
Now, only one board member remains: Chairman Kyle Hauptman. His term expired August 2, but in the absence of replacements, he continues to serve in a holdover capacity. In more stable times, such a transition would be routine. But with no Senate-confirmed, presidentially appointed board members currently in place, the NCUA teeters on shaky ground, Bacino said.
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“An agency with no Presidentially appointed and Senate confirmed board members would be unchartered territory that credit unions should not want to enter. If Hauptman were to depart, who ‘runs’ the agency?” Bacino said.
In such a scenario, operational leadership would likely fall to Executive Director Larry Fazio. However, without a functioning board, the agency would be restricted largely to conducting examinations, leaving vital regulatory functions—including charter approvals and mergers — effectively frozen.
The White House faces limited options.
It could nominate a new board, respecting statutory requirements that mandate bipartisan representation. Alternatively, the Senate, now under Republican control, could swiftly confirm an all-Republican slate—an aggressive move Democrats might struggle to block, according to Bacino.
Legal observers expect the Harper and Otsuka cases could ultimately reach the Supreme Court. Until then, the NCUA could be forced to operate with diminished authority — potentially for months — at a critical time for the credit union industry.
“These are anything but normal times.”
– Geoff Bacino
Former Board Member
NCUA
