Election results present prospects for changes at top of key agencies

(Nov. 13, 2020) Last week’s election results – in which Democrat (and former vice president) Joseph R. Biden claimed more electoral votes than Republican (and incumbent) President Donald Trump, as well as more than 5 million more actual votes — will have an impact on federal regulation of credit unions, likely beginning with who sits in the top regulators’ seats.

For NCUA, the result could mean a change who leads the agency. The chairman of the NCUA Board is designated by the president (not confirmed by the Senate if already sitting on the board), and does not serve a set term in that role, other than their term as a member of the board. Current credit union regulator board Chairman Rodney Hood (appointed by Trump) could be displaced by Biden in favor of a Democrat, as early as January following inauguration. Hood’s term on the board runs to August 2023. Board members may not succeed themselves.

The only Democrat currently on the board is Todd Harper, whose own term ends in April. Biden could name Harper board chairman, and then nominate another Democrat to take his place sometime after April. Harper could remain on the board until his successor is confirmed by the Senate.

And there may be more opportunities for the new president. NCUA Board Member J. Mark McWatters (a Republican appointee) is serving in a holdover capacity (since his term ended in August 2019) until the Trump nominee for his seat, Kyle Hauptman, is confirmed by the Senate. Hauptman’s nomination is currently pending before the Senate, after a split vote by the Senate Banking Committee to recommend confirmation. (Senate Democrats, on a voice vote, voted no.)

But a vote on Hauptman’s nomination has not yet been scheduled by the Senate. If the Senate fails to act before the current session ends in early January (and the current Congress with it), his nomination will come to an end – and Biden will have another seat to fill on the board, likely with a Democrat. (However, there is still plenty of time between now and Jan. 2 for the Senate to take up and act on Hauptman’s nomination.)

Meanwhile, the CFPB director’s job, now held by Kathleen Kraninger, will be up for change under a Biden administration – thanks to a Supreme Court decision just this year which ruled the director of the agency holds the job “at will” of the president, and is not only subject to “for-cause” firing, despite the five-year term the director fills once confirmed. Kraninger’s term runs to 2023.

Democrats in both the House and Senate have been roundly critical of Kraninger’s performance as director, and will likely argue that the new administration should make a change.