Gridlock, Deregulation and an NCUA Board of One
Sarah Snell Cooke, Founder/CEO, The Credit Union Connection and Cooke Consulting Solutions
Voters head to the polls tomorrow, and credit union leaders have a reason to care beyond the usual civic duty. Control of two committees, House Financial Services and Senate Banking, decides what gets a hearing, what gets a vote and what quietly dies. It may also decide whether the NCUA ever gets its board back.
There are very distinct scenarios.
If (When) Democrats take the House
Rep. Maxine Waters (D-Calif.), the committee’s ranking Democrat, would be in line to become chair, though the Bacino Report notes there may be challengers. The committee’s membership would swing toward Democrats, and the agenda would shift from deregulation to working to gain back the oversight Republicans put back in the hands of businesses.
A divided government means gridlock, which offers some certainty for credit unions. Hopes for the CFPB bill die in the Senate or get vetoed. Banking deregulation packages stall. The House stops sending bills that tie community bank relief to housing legislation, although they’ll have to tie key legislation to the budget bill to get anything through. Credit unions won’t get a big win, but nobody is going to hand them a surprise either.
If Republicans hold the House
The odds are against it, but odder things have happened. Republicans hold a razor-thin majority, and the party historically loses seats in midterm elections. The Bacino Report by former NCUA Board Member Geoff Bacino says Republican leaders admitted in mid-October that they’re mostly trying to limit the size of the Democratic wave. It predicts Democrats win by about 20 seats. With kitchen-table talk in many homes across America centering on the price of gas and groceries, it’s no surprise they’d vote against the status quo.
If Republicans do hold on, expect the House Financial Services Committee to look much as it does now. Chairman French Hill (R-Ark.) keeps the gavel, along with subcommittee chairs like Andy Barr (R-Ky.) and Dan Meuser (R-Pa.). More deregulation comes down the pipe, along with another stab at eliminating the CFPB. The committee has already advanced Hill and Barr’s Consumer Financial Protection Accountability and Reform Act, which moves the bureau’s funding from the Federal Reserve to the congressional appropriations process and raises the asset thresholds for institutions it supervises. Credit unions with less than $10 billion in assets are already outside the CFPB’s supervision, but it can still affect credit unions in the market.
That would be (pipe) dream news if you hate compliance burden, and the reality is likely to be more complex.
Credit Unions and the Senate
The Senate is a coin flip. Fox News rates control a toss-up while CNN says it goes to the Dems. Republicans need at least 50 seats because JD Vance, Republican vice president, breaks ties. The Bacino Report predicts Democrats pick up a 52-48 majority, with North Carolina, Maine, Ohio and Texas the likeliest flips. Credit union-friendly Susan Collins (R-Maine) is in the reelection battle of her life; however, former Democratic Senator Sherrod Brown (D-Ohio), another credit union-friendly candidate, is looking good with a five-point lead.
I give the edge to Republicans, because the tie-breaking math matters. And Senators return to their seats 80%-90% of the time; plus, the ‘everyone in Washington is an idiot except my Senator/Representative’ has a genuine impact. However, everything important that passes will need a supermajority either way, and given the polarity of modern American politics, it might not matter much.
If Republicans keep the Senate, Tim Scott (R-SC) stays as Banking Committee chair, with Warren as the ranking Democrat. Scott has talked about a separate bank legislative package covering community bank competitiveness, which would need Democratic votes. Warren has opposed riders she sees as tying housing relief to bank deregulation.
And while Elizabeth Warren (D-Mass.) has been a great credit union supporter, she’s also extremely liberal and the architect of the CFPB. If she takes over the Banking Committee chair, it could produce a wave of new regulations – and expenses. However, the Bacino report notes possible leadership challengers for her.
What makes the docket and what doesn’t
In a divided lame-duck session, only must-pass bills move. Here’s what that looks like for credit unions based on America’s Credit Unions and the Defense Credit Union Council updates:
Likely to move
The FY2027 defense bill, a prime vehicle for the Veterans Member Business Loan Act and permanent Central Liquidity Facility enhancements. Year-end negotiations are when riders, like banking deregulation, get attached to must-pass bills.
The STOP Payments Fraud Act gives credit unions and banks stronger, more flexible structural tools to combat rampant check and payment fraud. This has bipartisan support.
The Expanding Access to Lending Options Act extends loan maturity limits for credit unions from the current 15-year cap up to 20 years for non-mortgage loans, and up to 30 years for all mortgage loans. Identical bills in the House and Senate have received bipartisan support.
BSA/Bank Secrecy Act Threshold Updates need updating. They have a flat dollar amount, currently $10,000, that the bill would increase to $30,000 for CTRs and SARs. The House version received bipartisan support.
Worth watching
House Republicans introduced several deposit insurance proposals in March; credit unions want parity in whatever bill passes.
Unlikely
Both groups agreed the Credit Card Competition Act, which they oppose, faces long odds under either party, though a Democratic Senate has a few more champions for it.
Broad CFPB restructuring is another long shot, the groups agreed, because it would need a supermajority of 60 votes to overcome a veto by President Trump.
NCUA board and political machinations
This is the part that has me scratching my head. The NCUA’s board is supposed to have three members. Today it has one. John Crews was confirmed in August and now chairs the agency, but he’s the only member left. Trump fired Democrats Todd Harper and Tanya Otsuka in April 2025. A court ordered them reinstated, and an appeals court then stayed that order. Then, SCOTUS ruled in Trump v. Slaughter that the president can, in fact, fire heads of so-called independent agencies at will, but maintained the Fed’s independence. The agency has operated without a full board since.
Federal law also caps a board at two members from the same party. Crews is a Republican, so a full board needs at least one non-Republican. In the past, Congress has paired Republican and Democrat nominations when possible to help them move through more easily. But because President Trump loves streamlining, it might be just Chairman Crews for a while.
If Republicans keep the Senate, the nominations would move through Scott’s committee quickly, but only if the White House sends names. If Democrats win the Senate, Bacino says there’s little hope Trump and Schumer would agree on a pair of nominees. Makes sense. Either way, I wouldn’t expect a three-member board anytime soon. The lame-duck session, starting when the Senate returns November 9, is the one real window.
What you can do now
The most practical thing credit unions can do is comment on the NCUA’s open proposals, because with a one-member board those proposals are the live regulatory action. Comments on the third-party risk guidance are due Nov.16, and the rest follow shortly after. Congress is going to be busy being divided.
If you want help writing your comment letters and want to protect your anonymity, The Credit Union Connection will gladly work with you to write them! Contact Sarah at sarah@thecreditunionconnection.com.
What Your Vote Tomorrow Means for Credit Unions
Gridlock, Deregulation and an NCUA Board of One
Sarah Snell Cooke, Founder/CEO, The Credit Union Connection and Cooke Consulting Solutions
Voters head to the polls tomorrow, and credit union leaders have a reason to care beyond the usual civic duty. Control of two committees, House Financial Services and Senate Banking, decides what gets a hearing, what gets a vote and what quietly dies. It may also decide whether the NCUA ever gets its board back.
There are very distinct scenarios.
If (When) Democrats take the House
Rep. Maxine Waters (D-Calif.), the committee’s ranking Democrat, would be in line to become chair, though the Bacino Report notes there may be challengers. The committee’s membership would swing toward Democrats, and the agenda would shift from deregulation to working to gain back the oversight Republicans put back in the hands of businesses.
A divided government means gridlock, which offers some certainty for credit unions. Hopes for the CFPB bill die in the Senate or get vetoed. Banking deregulation packages stall. The House stops sending bills that tie community bank relief to housing legislation, although they’ll have to tie key legislation to the budget bill to get anything through. Credit unions won’t get a big win, but nobody is going to hand them a surprise either.
If Republicans hold the House
The odds are against it, but odder things have happened. Republicans hold a razor-thin majority, and the party historically loses seats in midterm elections. The Bacino Report by former NCUA Board Member Geoff Bacino says Republican leaders admitted in mid-October that they’re mostly trying to limit the size of the Democratic wave. It predicts Democrats win by about 20 seats. With kitchen-table talk in many homes across America centering on the price of gas and groceries, it’s no surprise they’d vote against the status quo.
If Republicans do hold on, expect the House Financial Services Committee to look much as it does now. Chairman French Hill (R-Ark.) keeps the gavel, along with subcommittee chairs like Andy Barr (R-Ky.) and Dan Meuser (R-Pa.). More deregulation comes down the pipe, along with another stab at eliminating the CFPB. The committee has already advanced Hill and Barr’s Consumer Financial Protection Accountability and Reform Act, which moves the bureau’s funding from the Federal Reserve to the congressional appropriations process and raises the asset thresholds for institutions it supervises. Credit unions with less than $10 billion in assets are already outside the CFPB’s supervision, but it can still affect credit unions in the market.
That would be (pipe) dream news if you hate compliance burden, and the reality is likely to be more complex.
Credit Unions and the Senate
The Senate is a coin flip. Fox News rates control a toss-up while CNN says it goes to the Dems. Republicans need at least 50 seats because JD Vance, Republican vice president, breaks ties. The Bacino Report predicts Democrats pick up a 52-48 majority, with North Carolina, Maine, Ohio and Texas the likeliest flips. Credit union-friendly Susan Collins (R-Maine) is in the reelection battle of her life; however, former Democratic Senator Sherrod Brown (D-Ohio), another credit union-friendly candidate, is looking good with a five-point lead.
I give the edge to Republicans, because the tie-breaking math matters. And Senators return to their seats 80%-90% of the time; plus, the ‘everyone in Washington is an idiot except my Senator/Representative’ has a genuine impact. However, everything important that passes will need a supermajority either way, and given the polarity of modern American politics, it might not matter much.
If Republicans keep the Senate, Tim Scott (R-SC) stays as Banking Committee chair, with Warren as the ranking Democrat. Scott has talked about a separate bank legislative package covering community bank competitiveness, which would need Democratic votes. Warren has opposed riders she sees as tying housing relief to bank deregulation.
And while Elizabeth Warren (D-Mass.) has been a great credit union supporter, she’s also extremely liberal and the architect of the CFPB. If she takes over the Banking Committee chair, it could produce a wave of new regulations – and expenses. However, the Bacino report notes possible leadership challengers for her.
What makes the docket and what doesn’t
In a divided lame-duck session, only must-pass bills move. Here’s what that looks like for credit unions based on America’s Credit Unions and the Defense Credit Union Council updates:
Likely to move
The FY2027 defense bill, a prime vehicle for the Veterans Member Business Loan Act and permanent Central Liquidity Facility enhancements. Year-end negotiations are when riders, like banking deregulation, get attached to must-pass bills.
The STOP Payments Fraud Act gives credit unions and banks stronger, more flexible structural tools to combat rampant check and payment fraud. This has bipartisan support.
The Expanding Access to Lending Options Act extends loan maturity limits for credit unions from the current 15-year cap up to 20 years for non-mortgage loans, and up to 30 years for all mortgage loans. Identical bills in the House and Senate have received bipartisan support.
BSA/Bank Secrecy Act Threshold Updates need updating. They have a flat dollar amount, currently $10,000, that the bill would increase to $30,000 for CTRs and SARs. The House version received bipartisan support.
Worth watching
House Republicans introduced several deposit insurance proposals in March; credit unions want parity in whatever bill passes.
Unlikely
Both groups agreed the Credit Card Competition Act, which they oppose, faces long odds under either party, though a Democratic Senate has a few more champions for it.
Broad CFPB restructuring is another long shot, the groups agreed, because it would need a supermajority of 60 votes to overcome a veto by President Trump.
NCUA board and political machinations
This is the part that has me scratching my head. The NCUA’s board is supposed to have three members. Today it has one. John Crews was confirmed in August and now chairs the agency, but he’s the only member left. Trump fired Democrats Todd Harper and Tanya Otsuka in April 2025. A court ordered them reinstated, and an appeals court then stayed that order. Then, SCOTUS ruled in Trump v. Slaughter that the president can, in fact, fire heads of so-called independent agencies at will, but maintained the Fed’s independence. The agency has operated without a full board since.
Federal law also caps a board at two members from the same party. Crews is a Republican, so a full board needs at least one non-Republican. In the past, Congress has paired Republican and Democrat nominations when possible to help them move through more easily. But because President Trump loves streamlining, it might be just Chairman Crews for a while.
If Republicans keep the Senate, the nominations would move through Scott’s committee quickly, but only if the White House sends names. If Democrats win the Senate, Bacino says there’s little hope Trump and Schumer would agree on a pair of nominees. Makes sense. Either way, I wouldn’t expect a three-member board anytime soon. The lame-duck session, starting when the Senate returns November 9, is the one real window.
What you can do now
The most practical thing credit unions can do is comment on the NCUA’s open proposals, because with a one-member board those proposals are the live regulatory action. Comments on the third-party risk guidance are due Nov.16, and the rest follow shortly after. Congress is going to be busy being divided.
If you want help writing your comment letters and want to protect your anonymity, The Credit Union Connection will gladly work with you to write them! Contact Sarah at sarah@thecreditunionconnection.com.