Financial regulators, including the NCUA and the CFPB, have issued a final rule attempting to distinguish the difference between rules and guidance, but the future of that rule and several others remained in flux Thursday, after President Biden issued a temporary moratorium on regulations until they can be reviewed by the new administration.
The NCUA is an independent regulatory agency and is not required to comply with Executive Orders, but in the past, the agency has said it tries to follow the “spirit” of such orders.
NCUA officials did not respond to a request for comment about the rule or Biden’s actions Thursday.
In recent months, the NCUA board has approved a flurry of rules, as the chairmanship of Republican Rodney Hood likely comes to an end. For instance, this month the board approved proposed rules dealing with complex credit union, the CAMEL rating system, CUSOs and a final rule dealing with CUSOs.
And after the meeting, the board approved a final rule clarifying that agency guidance does not carry the same force as rules and that enforcement actions may not be taken based on guidance.
However, Biden signed an Executive Order Wednesday stating that, with some exceptions, after Jan. 20, agencies should not send rules to the Federal Register for publication until a department or agency head designated by him reviews and approves the rule. The Executive Order also stated that rules that have been published but have not become effective yet should be delayed for 60 days.
It also remained unclear whether agency heads appointed by Biden will want to go along with rules that recently were released. Democrat Todd Harper, who is likely to become NCUA board chairman, opposed several of the proposals presented by Hood.
At the CFPB, a consumer law task force appointed by then-Director Kathleen Kraninger issued a report containing proposed changes to the financial regulatory regime.
However, Kraninger resigned Wednesday at Biden’s request. Biden has announced his intention to nominate Federal Trade Commission Member Rohit Chopra to head the CFPB. Chopra worked for former CFPB Director Richard Cordray, who pushed a much stricter regulatory framework than Kraninger favors.
Until Chopra can be confirmed, Biden appointed CFPB employee Dave Uejio to run the agency. Uejio worked for both Cordray and Kraninger.
Meanwhile, Biden also rejected an Executive Order issued by Trump that restricted the types of diversity training agencies may conduct.
A Latinx activist charged in September that her speaking engagement at the NCUA was cancelled at the last minute, as the agency enforced the Trump Executive Order. Rosa Clemente was scheduled to hold a session entitled, “Unapologetically Black: Afro-Latinx Culture and Identity” as part of a Hispanic Heritage Month event.
The Quiet Governance Risk Credit Unions Should Talk About By Grant Sheehan, CCUE | CCUP | CEO, NCOFCU Having spent many years both serving on a credit union board and leading as a CEO , I’ve had the opportunity to see governance from both sides of the table. That perspective has given me a deep appreciation for the delicate balance that must exist between management, leadership, and board oversight. When that balance works well, credit unions thrive. But when it slowly shifts — often unintentionally — it can create governance weaknesses that regulators and examiners increasingly watch for. In conversations with governance professionals and through years of industry experience, one theme keeps emerging: most governance problems don’t begin with bad intentions or misconduct. They begin with boards that gradually become too dependent on management. This is rarely obvious at first, but in fact, it often occurs within high-performing organizations. But slight patterns ca...
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