Two Democratic lawmakers are demanding clarification on the National Credit Union Administration board’s legal authority to carry out standard agency procedures lacking a quorum following the April firings of two board members.
Sen. Elizabeth Warren, D-MA, and Rep. Maxine Waters, D-CA, sent a letter Friday to NCUA Chair Kyle Hauptman, the sole member of the agency’s board, seeking answers and additional documents to understand the legitimacy of the board’s activities after the April terminations.
After President Donald Trump “illegally” fired NCUA’s now-former board members, Todd Harper and Tanya Otsuka, both Democrats, on April 16, the two lawmakers sent a letter to the NCUA Office of Inspector General requesting an investigation of the agency’s authority to continue full operations with only Hauptman at the helm.
Both Harper and Otsuka are suing Trump and some other government officials over their “patently unlawful removal[s].”
The lawmakers’ letter sent Friday follows up on the response received from the NCUA’s OIG, as that response raised serious concerns about the agency’s governance post-firings, according to the Democrats.
The NCUA oversees $2.3 trillion in credit union assets serving 142 million members, so the “absence of any meaningful description of what the agency can do during periods of time when it has a one-person Board raises serious concerns and questions,” the lawmakers said.
Warren is the ranking member of the Senate Banking Committee, and Waters is theranking member of the House Financial Services Committee.
Warren and Waters had asked the IG for information from the legal analysis taken by the NCUA or other administration officials to assess the impact of the firings on the agency’s board, copies of all written communications among the NCUA, the White House and other administration officials related to the decision, and a list of the actions taken by the NCUA after the dismissals.
“The IG response included troubling information that suggests neither the NCUA or the White House understands what actions the agency can lawfully take in the wake of the firings,” the lawmakers wrote.
According to the documents, a single NCUA board member may “carry out any essential function,” but there are no supporting documents pointing to the difference between “essential” and “non-essential” functions.
The NCUA board cannot fully function with only one member, since by statute the agency’s board must comprise three members with a majority constituting a quorum. The lawmakers pointed out that the agency’s regulations specify that “agreement of at least two of the three Board members is required for any action by the Board.” Also, regulations prohibit holding a meeting if the quorum is not met.
Warren further noted that while the chair has expanded unilateral authority during emergencies, “the NCUA is not currently in a state of emergency,” and outside of an emergency, board members’ actions are limited.
Despite these limitations, 11 Board Action Memorandums have been processed since April 16, with only one receiving a vote from Harper before his termination.
“However, you appear to have acted on the BAMs unilaterally, again without any consideration of whether these actions are ‘essential function[s] of the NCUA Board,’” Warren and Waters said.
In early May, the NCUA liquidated New Jersey-based Unilever Federal Credit Union and declared it insolvent. The agency also issued two consent orders against credit union employees prohibiting them from participating in the affairs of any federally insured depository institution.
The lawmakers have asked Hauptman to define the board’s essential functions and clarify whether any of the 11 BAMs processed during the period can qualify as “essential action.” If so, the lawmakers have demanded an explanation as to why.
They further requested clarification on what constitutes an emergency and inquired whether the agency was currently operating under an emergency.
The IG reported that “no one at the NCUA, including the Board Chairman and Chief of Staff, knew about the removals until after they occurred.” The lawmakers have asked for documents that show whether there were any communications among NCUA officials, the White House and administration officials after Harper and Otsuka’s firings.
Further, the Democrats questioned whether NCUA officials communicated with White House officials about the agency's ability to issue regulations with only one board member, citing an executive order that requires independent agencies like the NCUA to submit draft regulations to the White House's Office of Management and Budget.
In the aftermath of the firings, the NCUA chief of staff emailed the agency’s general counsel and deputy general counsel, saying she wanted to discuss the “risks we might face going forward.”
“What 'risks' did the Chief of Staff, General Counsel, Deputy General Counsel, and other NCUA officials identify as facing the NCUA in the wake of the firings?” Warren and Waters asked.
The lawmakers asked for a response by July 7.
