ALEXANDRIA, Va.–NCUA may have already reached its target of reducing staff by 20% as the Trump administration pressures regulatory agencies to reduce headcount, although the agency has not confirmed what several people said they are hearing.
Thos same individuals have also expressed their concerns that a lot of “institutional memory” may be headed out the door.
During a podcast hosted by Mark Treichel, who during his 33-year career worked his way up from examiner to executive director, John McKechnie, an advocate for credit unions on Capitol Hill who spent five years at NCUA as director of public and congressional affairs, and Geoff Bacino, who now leads an association management firm and who served on the NCUA board, shared what they have heard from inside NCUA regarding the staff reductions.
Updates & Board Meetings
The NCUA board was to hear an update on that issue during its April board meeting, but after board members Todd Harper and Tanya Otsuka were fired by President Trump, the board meeting was cancelled.
NCUA now says it will provide an update on the “Voluntary Separation Program” when the board—which currently consists of Chairman Kyle Hauptman—meets on May 22.
During the podcast Bacino said he has been told NCUA employees are being offered a separation plan that has two components:
- The first is for those who are not eligible to retire who instead go on administrative leave through -year end with pay. but they must leave immediately
- The second is for those who are eligible for retirement who are being offered $50,000 and are not put on administrative leave, they are simply “gone.”
Staff of Approximately 1,000 People
Treichel, McKechnie and Bacino all agreed the NCUA has been told by the Elon Musk’s Department of Government Efficiency (DOGE) to shrink headcount by 20%, and they believe the agency is on track for doing so, which would reduce total employment at NCUA to approximately 1,000 people.
While there is disagreement over how many DOGE-representatives met several weeks ago with what was then a three-person NCUA board, McKechnie said he did hear from one person at NCUA who was part of the meeting that the DOGE representatives questioned why there was so much empty space in NCUA’s headquarters building. While just speculation, he said that could lead DOGE to recommend NCUA sell its headquarters on Duke Street on Alexandria, Va.
As the CU Daily was first to report here https://thecudaily.com/in-irony-ncuas-asset-management-center-building-now-the-asset-thats-for-sale/, NCUA currently is looking to sell the office space that used to be home to its Asset Management Assistance Center (AMAC) in Austin, Texas.
‘A Lot of Corporate Knowledge’
Treichel said during the podcast he has heard similar things about what is being offered to NCUA staff and how many have accepted the offers, a pace he said quickened after the two NCUA board members were fired. As he noted, that 20% reduction would represent one-out-of-every-six employees at the federal regulator.
“That’s a lot of corporate knowledge,” he observed.
Added Bacino, “We’re going to see a reshuffling, but also a brain drain of people who have an institutional memory, and that’s what scares me the most. We’re going to have a lot of people who are going to try to reinvent the wheel.”
Treichel said the scenario reminds him of an observation he once heard: “If you don’t’ know why a fence was put up you might not want to take it down.”
The Biggest Concern
McKechnie said his biggest concern is around actual examinations and supervision of credit unions, which is where the agency needs to remain focused. NCUA has got to continue to keep its eye on the ball when it comes to safety and soundness.,” he said.
The podcast can be watched here.
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