3 priorities for NCUA Board nominee Hauptman: Pandemic, technology, ‘aligning’ incentives

Managing the fallout from the current pandemic, expanding technology’s role in reaching the underserved, and aligning incentives to promote sound credit union performance are the three priorities outlined briefly in written testimony slated Tuesday by the president’s nominee to the board of the federal credit union regulatory agency.

Kyle S. Hauptman was nominated by the president last month to the National Credit Union Administration (NCUA) Board to fill the seat currently occupied by agency Board Member J. Mark McWatters. McWatters, who has also served previously as the agency’s board chairman, has been serving on the board in holdover capacity since last August, when his term expired.

Hauptman, if confirmed by the Senate, would serve the remainder of a six-year term that ends in August 2025.

According to a release from the White House, Hauptman is now staff director of the Senate Banking Committee’s economic policy subcommittee; it said he also serves as economic policy advisor to Sen. Tom Cotton (R-Ark.), a Banking Committee member. Additionally, it stated, Hauptman worked on Trump’s 2016 presidential transition team and was a policy advisor for financial services to 2012 Republican presidential nominee Mitt Romney during that campaign (Romney is now a U.S. senator from Utah). It said Hauptman holds a B.A. from the University of California, Los Angeles (UCLA) and an MBA from Columbia University.

In a brief, 2 1/2-page opening statement now posted on the Senate Banking Committee’s website, Hauptman underscores his focus on working in a bipartisan manner, airs positive views of credit unions, and discusses his three priorities for his work at the NCUA.

No. 1, he said, is managing the fallout from the current pandemic and economic downturn. “While the 2008 crisis began in the financial sector and then hit Main Street, our current crisis may be the reverse. Credit unions were chartered to serve those of modest means, and I plan to work with them, the Board and Congress on solutions for those facing financial stress,” he stated.

Second is expanding technology’s role in reaching the underserved. “The pandemic created a test case on how many things, such as this hearing, can be done remotely or online,” he states. “If we recall the litigation years ago about Blockbuster Video’s late-fees and market dominance, the ultimate solution was American startups like Netflix. While this analogy doesn’t perfectly align with credit unions, I’m convinced innovation can provide more inclusive financial services.”

The last of his three priorities, he stated, is aligning incentives. “As we know from the last crisis, we get what we incentivize. One excellent policy that serves as a model here is the less-frequent exam cycle for credit unions that get the highest marks on their NCUA exams for safety and stability,” he stated. “This policy lets regulators focus on more problematic credit unions, while the well-run credit unions strive to keep earning that benefit. This is policy where safety and soundness are well-aligned with serving members. Do this correctly, and we’ll combat poor-quality high-priced products with better, lower-priced ones.”

Tuesday’s Senate Banking hearing begins at 10 a.m. and will be webcast live.

Hauptman statement