(Dec. 4, 2020) A new member will be sitting at the next meeting of the NCUA Board when it gathers in about two weeks, thanks to action taken by the Senate this week.

Kyle S. Hauptman was confirmed by the Senate Wednesday on a bipartisan vote of 56-39, clearing the way for his swearing in and subsequent participation in a vote slated Dec. 17 on the agency’s 2021-2022 budget.

Nominated June 18 to the NCUA Board by President Donald Trump, Hauptman has most recently served as a staff director for the economic policy subcommittee of the Senate Banking Committee and as an economic policy advisor to Sen. Tom Cotton (R-Ark.). He worked on the 2016 Trump presidential transition team and served as a policy advisor on financial services for 2012 Republican presidential nominee Mitt Romney (now a U.S. senator representing Utah).

Confirmed to a term that continues into August 2025, Hauptman will take the seat recently vacated by J. Mark McWatters, whose term on the board expired in August 2019. McWatters had been serving in holdover capacity until his resignation Nov. 20.

That resignation followed by one day McWatters’ noting during an open board meeting that he would not approve of the agency’s proposed budget without certain changes.

NASCUS President and CEO Lucy Ito congratulated Hauptman on behalf of the state credit union system. “We look forward to working with him over the coming years,” Ito said. “There are a number of key issues of importance to state credit unions, including maintaining an equitable overhead transfer rate from the NCUSIF, continued consideration of subordinated debt for use by all federally insured credit unions, and on-going dialogue and collaboration between state and federal regulators. We are eager to meet with the newest NCUA Board member to discuss these and other issues as together we work toward a strong, and safe, credit union system.”

Hauptman’s confirmation fills out the membership of the agency’s board, as he joins Chairman Rodney Hood and Member Todd Harper. Both Hood and Hauptman are Republican appointees; Harper is a Democrat appointee. Hauptman becomes the third member to join the board in less than two years: both Hood and Harper joined the board in the spring of 2019 (although Hood is serving a second stint on the panel, having served on the board from 2005-09).

During a board briefing Wednesday, both Hood and Harper publicly congratulated Hauptman on his confirmation. Harper, further, noted that all three board members’ names now begin with the letter “H,” replacing the “Ms” on the board (when Chairman Debbie Matz, and Board Members Rick Metsger and J. Mark McWatters all served on the board together).

Interestingly, the last time all three board members’ last names began with the same letter (the “Ms”), all three, eventually, served as board chairmen. Harper could be in line to become the next board chairman (as a Democratic appointee) after Joe Biden is inaugurated as president Jan. 20.

(Nov. 25, 2020) Change is coming to the NCUA Board in the next 10 days or so, following change that already occurred late last week with the resignation of one of the board members. Here’s a quick rundown of what happened late last week, what’s scheduled to happen next week, and a look at what may be ahead for leadership of the agency.

• Last week, Senate Majority Leader Mitch McConnell (R-Ky.) announced (via the Senate’s executive calendar, which lists when executive branch nominees will begin to be considered by the Senate) that the nomination of Kyle S. Hauptman to be a member of the NCUA Board would be considered as early as Monday of next week (Nov. 30). Hauptman was nominated by outgoing President Donald Trump (R ) last summer to take the seat of J. Mark McWatters, whose term expired in August 2019; McWatters has been serving in a holdover capacity until his successor (Hauptman) was confirmed by the Senate. McWatters is a former chairman of the NCUA Board (succeeded by current Chairman Rodney Hood last year), who was named to that position by Trump.
• On Thursday, during the regular monthly meeting of the NCUA Board, both Board Members McWatters and Todd Harper expressed some dissatisfaction with the proposed NCUA budget for 2021, which is scheduled to be the subject of a Dec. 2 briefing by the agency (and which NASCUS has requested to provide comments for). McWatters also announced that he would not support the 2021 staff budget as drafted “as long as I’m on this board.” The NCUA Board is scheduled to consider the 2021 budget at its next monthly meeting, set for Dec. 17.
• Late Friday, McWatters released a copy of a letter he said he had sent to Trump that day informing the president that he was submitting his resignation. “As the Senate is scheduled to confirm my successor in the next few days, I hereby resign my position as of today,” McWatters wrote.
• Monday, Hood publicly released a statement noting McWatters’ resignation, observing that “his years on the NCUA Board are a credit to his decades-long career in law and policymaking. I wish Mark all the best in his future endeavors.” (NCUA Board Member Todd Harper – who also voiced concerns about the budget – released a statement on social media reading (in part) “Mark leaves the Board with a commendable record of achievement, and I wish him well in his future endeavors.”)

The end result of all of this: When the NCUA Board meets Dec. 17 to consider the 2021 budget – including the overhead transfer rate (OTR) for the NCUSIF portion of the agency spending plan – there could be one new face on the board, and perhaps two votes in favor of the agency’s budget for next year.

Looking ahead, with the transition of President-elect Joseph R. Biden (D) now officially underway in advance of the Jan. 20 transfer of power from Trump, there is likely to be more change. The new president will be in a position to designate a new chairman of the NCUA Board (that position is not confirmed by the Senate if the individual has already been confirmed as a board member). As the only Democrat-appointee on the board, Harper is in line to become the next NCUA Board chairman if the president decides to take action.

The most recent example of the president tapping a member of his own party to be chairman: McWatters was named acting chairman of the agency board by Trump on Jan. 26, 2017 – six days after taking the oath of office as president. McWatters replaced Rick Metsger who remained on the board (ultimately to be succeeded by Hood). The “acting” part of McWatters’ title was removed by Trump in June of that year.

Harper’s term on the board ends in April; however, he may serve on the board until a successor is confirmed by the Senate. Hood’s term ends in August 2023; Hauptman, if confirmed, would inherit a term that runs to August 2025.