By Ray Birch
WASHINGTON—NCUA nominee John Crews used his Senate Banking Committee confirmation hearing Thursday to lay out an agenda centered on reducing regulatory burden for smaller credit unions, encouraging technological innovation and reviving the formation of new credit unions, while declining to weigh in on the legality of the NCUA's current one-member board because of pending litigation.
Although much of the hearing was dominated by sharp questioning of fellow nominee Christopher Phelan over the economy, inflation, tax policy and President Trump's agenda, Crews' exchanges with senators offered insights into how he might approach regulating the credit union system if confirmed.
The hearing proceeded despite questions on Capitol Hill over whether it would even take place following Wednesday's political turmoil surrounding President Trump's demand that Congress pass the SAVE America Act before he signs bipartisan housing legislation and the Senate's decision to leave Washington early for its Independence Day recess.
In addition to Crews, the committee considered the nominations of Phelan to chair the Council of Economic Advisers and Jeffrey Ledbetter, nominee to be Inspector General of HUD.
Crews' opening statement emphasized three priorities should he be confirmed: maintaining the safety and soundness of the credit union system through "efficient, effective and risk-based" supervision; continuing Chairman Kyle Hauptman's work on technological innovation, including artificial intelligence and stablecoins; and encouraging more de novo credit union charters.
He argued that most credit unions are small institutions that deserve a regulator that recognizes their limited resources, saying a risk-based supervisory approach would allow NCUA to focus its attention where risks are greatest while easing unnecessary burdens elsewhere. Crews also said new technologies can improve service to members and help reach underserved communities if implemented responsibly, and called the creation of new credit unions "a priority" because they represent the long-term health of the movement.
Committee Chairman Tim Scott (R-SC) briefly framed Crews as someone who understands both safety and soundness and the need to avoid unnecessary regulatory burdens that increase costs and reduce access to financial services. Warren, meanwhile, said credit unions need a "stable and thoughtful regulator" as they confront increasing competition and technological change, but criticized the Trump Administration over the NCUA's current leadership structure.
She argued the Administration's unwillingness to appoint Democratic board members threatens the agency's independence.
That issue resurfaced during questioning from Sen. Tina Smith (D-MN), who repeatedly pressed Crews on whether the NCUA should have the three-member, politically balanced board required by law. Crews answered that he would respect the outcome of the pending litigation challenging the board's composition, but repeatedly declined to express an opinion because the issue is before the courts.
As CUToday.info has previously reported, former NCUA Board Members Todd Harper and Tanya Otsuka were removed by the Trump Administration last year, and litigation over those dismissals remains pending.
When Smith noted that the statute itself prescribes a three-person politically balanced board and suggested that should not be controversial, Crews again said only that the current board structure is the subject of litigation. Smith responded that she found the answer disappointing, arguing that failing to maintain a bipartisan board injects politics into an agency whose credibility depends on independence.
Republican senators instead focused on policy issues affecting credit unions. Sen. Katie Britt (R-AL) asked how Crews would help credit unions modernize as they adopt new technologies while ensuring the Share Insurance Fund remains protected. Crews said consumers increasingly expect innovative digital financial services and noted that many smaller credit unions collaborate to gain access to technology they could not otherwise afford.
He said NCUA should support those efforts while recognizing that cybersecurity represents a significant and growing risk. Crews called cyber threats "a serious threat" and said the agency should continue building on NCUA's recently issued cyber threat report by maintaining an "open door" with credit unions, listening to what members are demanding and helping institutions safely implement new products while providing guidance on emerging risks.
Decline In New Charters
Sen. Pete Ricketts (R-NB) turned to the steady decline in new federal credit union charters, particularly in rural communities. Crews agreed the trend is troubling and said encouraging de novo institutions would be one of his highest priorities. While acknowledging that economic competition has contributed to fewer new charters, he argued regulation has also played a role.
Crews said regulators' efforts to eliminate institutions that are "too big to fail" have inadvertently created another problem—institutions that are "too small to succeed." He said NCUA should examine how to tailor regulation so smaller and rural credit unions have a greater opportunity to survive and grow.
Crews also fielded questions from Sen. Bernie Moreno (R-OH) about concerns that stablecoins could trigger deposit flight from traditional financial institutions. Moreno asked how many billions of dollars had left credit unions because of stablecoins.
Crews rejected the premise, responding that credit union deposits actually increased last year despite growing attention to digital assets. While acknowledging he has heard concerns about the potential impact of stablecoins, he said recent deposit growth suggests the industry has not experienced the type of migration some critics have predicted.
CU Trades Comment
Jason Stverak
The Defense Credit Union Council Thursday said it appreciates the Senate Committee on Banking, Housing, and Urban Affairs for today’s thoughtful consideration of John Crews’ nomination to serve on the NCUA board.
"We remain pleased to support his nomination and commend the Committee for examining the future direction of the federal credit union system," stated DCUC Chief Advocacy Officer Jason Stverak. "Throughout today’s hearing, Mr. Crews demonstrated a clear appreciation for the unique mission of credit unions and the important role they play in strengthening communities, expanding financial inclusion, and serving those who have sacrificed for our nation. His recognition of the importance of fostering de novo credit unions is particularly encouraging. A healthy chartering environment is essential to ensuring that consumers continue to benefit from innovation, local leadership, and greater access to cooperative financial services.
Stverak said DCUC is also encouraged by Crews’ understanding of the challenges confronting small and mid-sized credit unions.
"As regulatory burdens continue to fall disproportionately on smaller institutions, it is critical that the NCUA remain focused on maintaining a supervisory framework that protects safety and soundness while allowing credit unions to grow, innovate, and meet the evolving needs of their members. Mr. Crews’ acknowledgment of these realities reflects an appreciation for the diversity of the credit union movement and the value smaller institutions bring to military communities and towns across America," he said.
Equally important, Stverak said, was Crews’ commitment to engaging directly with credit unions and stakeholders.
"His pledge to work collaboratively with institutions, listen to their concerns, and help them succeed demonstrates the type of transparent and accessible leadership that strengthens both the regulatory process and the credit union system as a whole. Effective supervision is built not only on accountability, but also on open communication and mutual respect," Stverak said.
Stverak added that for defense credit unions serving active-duty servicemembers, veterans, military families, and civilian defense communities around the world, thoughtful regulation is "inseparable" from military financial readiness.
James Akin
"We believe Mr. Crews appreciates that strong, well-capitalized, member-focused credit unions are indispensable partners in supporting those who serve our country," he said. "DCUC looks forward to working with Mr. Crews, if confirmed, to promote policies that encourage responsible innovation, support the formation of new credit unions, preserve a vibrant and diverse credit union system, and ensure that institutions of every size have the opportunity to grow and better serve their members. We urge the Senate to move expeditiously to confirm his nomination."
America’s Credit Unions thanked Scott, Warren and members of the Senate Banking Committee for holding the nomination hearing.
"John Crews’ testimony highlights his experience, knowledge of financial services issues and qualification to serve on the NCUA board," said ACU Head of Regulatory Advocacy James Akin. "Should Crews be confirmed, he would continue the agency’s efforts to modernize and right-size credit union regulations for the future. Credit unions are a backbone for Main Street; it is no mistake that 146 million Americans rely on credit unions to improve their financial well-being. America’s Credit Unions urges the Committee to quickly advance Crews’ nomination to the Senate floor.”
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