The National Credit Union Administration board on Thursday held its first meeting since becoming a one-man entity, and Chairman Kyle Hauptman received an update from staff on the agency’s voluntary separation program.

It was the credit union regulator’s first open board meeting since February. The past two monthly meetings were cancelled, including April’s after President Donald Trump fired Democratic board members Todd Harper and Tonya Otsuka.

The separation issue was originally on the agenda for the canceled April board meeting.

The NCUA Thursday said it expects approximately 250 employees to opt out as part of the program. To date, 152 employees have been placed on paid administrative leave until they officially separate from the agency no later than Dec. 31.

“Throughout this process, my top priority was to design a program that provided employees with certainty, was voluntary and fair, and allowed the NCUA to meet its operational needs,” Hauptman said.

The regulator said it expects to generate approximately $75 million in gross savings from the separations starting in 2026.

NCUA Executive Director Larry Fazio said moves became necessary after the Trump administration directed some federal agencies – including the NCUA – to engage in “large-scale reductions in force.”

He said the agency determined that a voluntary separation program was preferable over layoffs because it would be more cost effective and less disruptive to the agency’s operations.

“Some of our most seasoned and experienced leaders, managers and experts are participating in the [program], so although we’ll be losing some institutional knowledge to be sure, we are confident the next generation of the NCUA’s workforce is up to the challenge,” he said.

The NCUA said it will not see significant cost savings this year because those workers participating in the program will mostly be on the payroll through the end of the year. But next year it estimates around $75 million will be available to reduce the agency’s annual budget.

Hauptman said workforce reductions plans happen in corporate America all the time, the difference with the NCUA’s plan being that “people in the private sector usually don’t get nearly this good of a deal.”

He added that some of NCUA’s savings should be returned to credit unions.

The one major variable outside of the NCUA’s control, Hauptman said, is the hiring freeze that is in place concurrent with the layoffs.

“We are going to need to hire some good people to help,” he said.

But even after the freeze is lifted, the agency will only be permitted to hire one employee for every four departures, staff said.

Mark Treichel, former NCUA executive director who now runs Credit Union Exam Solutions, told Tyfone that the short-term positives from NCUA’s downsizing update include that fewer examiners took the buyout compared to Central Office staff, so the impact on exams is limited.

He added that well-run credit unions with stable management and strong CAMELS scores will see NCUA less often. And some of the cost savings are projected to reduce the 2026 operating fee.

“However, what interests me most are the subtle hints about changes to NCUA’s future organizational structure,” Treichel said.

Harper took to LinkedIn this week to say that the NCUA board remains without a quorum as defined by statutory law.

“The NCUA can’t write, revise, or repeal rules. It means the agency can’t take board-required actions on mergers or enforcement. It means it can’t consider material exam appeals, and it can’t hire certain senior executives,” Harper wrote.

Former NCUA official Chip Filson this week said he hoped the board meeting would reveal who is actually in charge of the regulator. Filson previously served as president of the Central Liquidity Facility and director of the NCUA’s Office of Programs.

“The board’s job by statute is to manage the agency,” Filson wrote. “If a person has a question about any area of activity, who are the persons with line responsibility? Can an org chart be published?”

“The administration knows that since we’re not picking the 20% who leave, you’re going to have departments with huge holes, and you gotta fill them.”

 – Kyle Hauptman
Chairman
NCUA