President Biden’s decision this week to name Todd Harper as chairman of the National Credit Union Administration puts in place a highly qualified, deeply experienced regulator at the helm of the industry’s supervisor and federal insurer. As chairman, Harper has pledged to “focus on four policy priorities: capital and liquidity, consumer financial protection, cybersecurity, and diversity, equity, and economic inclusion.”
Mr. Harper is a wise choice to lead NCUA, and by all accounts he will take his new role as a regulator seriously. All too often credit union regulators become industry cheerleaders rather than responsible watchdogs. His record of public service to date is encouraging, and we look forward to Chairman Harper taking his seat alongside other banking regulators as they work to ensure the same regulations apply to like-kind institutions.
Large credit unions have been relentless in their pursuit of assets and members, a trend that has continued during the COVID-19 pandemic and will do so as long as their regulator does not force them to play by the rules and live by the spirit of the federal Credit Union Act that cemented their status as mission-minded, purpose-driven not-for-profits.
Mr. Harper and his fellow NCUA board members Rodney Hood and Kyle Hauptman should use this opportunity to refocus the agency on ensuring large credit unions are held to account and not allowed to become essentially tax-exempt banks with fewer protections for consumers.
We urge the NCUA to stop large credit unions from exploiting field-of-membership requirements in their hunt for assets, from ignoring their responsibilities to serve low-income and underserved communities as their charter intended, from taking on risky and potentially systemically damaging debt from outside investors, and from the most blatant form of mission-creep – buying up tax paying banks.
Large credit unions are giving a good industry a bad name. They hide behind the mantra “people and not profits,” leveraging the good work of their smaller mission-focused counterparts while continuing to press every possible lever to operate as tax-exempt banks. These financial powerhouses remind one of the old “Saturday Night Live” sketch about the murderous land shark: “Just a dolphin, ma’am.”
Mr. Harper recently labeled one especially audacious proposed NCUA change “hocus-pocus worthy of Harry Houdini.” Such slights of hand, bearing the stamp of a government agency, are unfortunately all too common in credit union land.
As NCUA Chairman, we hope Mr. Harper adheres to the priorities and supervisory path he has outlined – one focused on consumer benefits and protections, on systemic safety and soundness, and on ensuring that the nation’s credit unions abide by the letter and spirit of the law.