Alternative capital at credit unions is the subject of an advance notice of proposed rulemaking by NCUA published by the Federal Register today, opening the 90-day public comment period.
Comments will be due on the proposal May 9.
The publication date is significant, as it follows the declaration by the NCUA last week that it is an “independent agency,” and is thus not subject to the regulatory freeze imposed by President Donald Trump on Jan. 20.
Since the freeze was imposed, there has been some incongruity of opinion about whether or not it applied to independent agencies, which includes the federal financial institution regulators (among others). To date, the credit union regulator is the only one of the five financial institution supervisors to publicly assert its status as an independent agency.
However, since the freeze was imposed only the Federal Reserve has published a final rule (pending since the freeze was imposed); no other significant proposed rules have been published, until the NCUA ANPR was published.
The freeze requires that new rules that have been sent to the Federal Register but not yet published be immediately withdrawn. Rules that have been published but have not yet taken effect are postponed for 60 days.
In the memo to executive departments and agencies transmitting the order, Trump Chief of Staff Reince Priebus stated the purpose of the freeze is to ensure that “the President’s appointees or designees have the opportunity to review any new or pending regulations.”
Additionally, Priebus’ memo noted that Trump has ordered that federal agencies “send no regulation to the Office of the Federal Register (the “OFR”) until a department or agency head appointed or designated by the President after noon on January 20, 2017, reviews and approves the regulation.”
The department or agency head may delegate this power of review and approval to any other person so appointed or designated by the President, consistent with applicable law, the Priebus memo added.
The credit union regulator is in a slightly different situation from its sister organizations – its top regulator, Acting NCUA Board Chairman J. Mark McWatters, was appointed by Trump to his position. The appointment was made late last week when Trump named McWatters, a Republican, to the top job, replacing sitting Chairman Rick Metsger, an Obama-appointed Democrat. Metsger remains on the board as a member; the third seat on the panel is vacant since the retirement last spring of then-Chairman Debbie Matz (D).