This article was originally published on ChipFilson.com.

If Senate hearings proceed as planned and Trump’s nominee for the next NCUA chair is approved, last week’s board meeting will have been Hauptman’s final time as NCUA’s solo leader.

As he departs, the NCUA situation is like a suitcase without a handle or wheels. The agency is being led by a single person, not the prescribed board. Its operating capacity has been reduced by a DOGE-induced, staff-designed elimination of 20% of its workforce.

Flooding the zone

Hauptman’s major initiative has been to “flood the zone” with over a dozen regulatory reviews addressing such urgent issues as banks’ purchase of credit unions versus the operational realities of credit unions’ purchase of banks.

The agency continues to publish a repeating loop of bureaucratic processes such as banning people from further activity in credit unions or periodic issuance of credit union data. When the next administrator opens the suitcase, he is likely to find little addressing critical cooperative or administrative management issues, e.g., the effectiveness of agency examinations. One indicator is the growing list of summary liquidations from sudden discoveries of significant, long-term large operating deficits.

Hauptman has held board meetings “only as necessary.” His solo tenure of almost 15 months is an example of the shortcomings of a single administrator without either credit union context or regulatory experience. However, that resume gap is not unique to him.

The knowledge gap

Such appointments, especially as Chair, mean the learning curve for new leadership is extended, and there is total dependence on the bureaucracy’s agenda. More critically, there is a lack of relationships and knowledge of the credit union system and its different leadership elements. It narrows the understanding of issues from both an historical perspective as well as key differences about current system priorities.

The result is that the cooperative system’s uniqueness and capacity are underestimated. Critical issues are viewed from the more familiar perspective of the banking system. And the siren call of some lobbyists for the false standard of “parity” becomes a basis for decisions.

A vacuum in dual regulatory oversight

There has been a vacuum in regulatory leadership at both the state and federal levels for some time. It is hard to think of a comment or action taken in either system that addresses important trends and issues in a considered manner. The issues silently observed include purchases of banks, the merger frenzy driven by CEO payouts, the absence of real member governance rights, and zero transparency in credit union strategy and cooperative accountability to owners.

Leading the NCUA is not a one-person job; it requires both administrative oversight plus constant dialogue and initiatives with credit unions, collectively and individually.

An empty suitcase

Right now, the NCUA’s suitcase is pretty light. It may be easy to lift without a handle. But sooner or later, the movement will experience the consequences of a regulatory system that has no cooperative agenda or engaged oversight.

As the regulatory grasp and staff effectiveness erode, this will create a series of reactive responses to ideological/political priorities or to inevitable external problems or crises. The system will be at the mercy of events without informed and committed regulatory leadership.