Former NCUA Staffer Talks How This Year Will Be Different Than Years Past...

Elizabeth Eurgubian

by Lisa Freeman
CUbroadcast Contributing Editor

Just weeks after leaving the National Credit Union Administration (NCUA), the freshly minted partner at Atlas Advocacy Elizabeth Eurgubian offered a look at things to come from the federal regulator. First clarifying that her departure was not a part of the sweeping reductions in workforce (RIF) mandated by the Department of Government Efficiency (DOGE), Eurgubian said, “I stayed for about a month to help with the transition, then I left, went to Mexico, had a couple of margaritas,” and then came to America’s Credit Unions Governmental Affairs Conference to share some observations about the agency she served.

Eurgubian, whose career includes posts at the Federal Reserve, the Independent Community Bankers Association and the Credit Union National Association, was quick to note that as she no longer works for NCUA, she could, in some ways, be more candid, but that she would only be expressing her own opinions, as opposed to speaking for the agency.

She also warned credit unions that as they seek to meet with and lobby regulators and lawmakers alike, this year likely will feel different from years past. “It’s going to be more difficult this year,” she said, noting that with the flurry of executive orders coming out of the Trump White House, agencies are very busy trying to determine which orders apply to them.

For example, an order having to do with maritime law likely isn’t relevant to NCUA, and the regulator can put it aside, she said. Then there will be those that are obviously applicable and must be complied with, and then there will those that fall somewhere in between -- many of which NCUA may choose to comply with even if they aren’t directly applicable to it.

It’s a huge undertaking Eurgubian said, calling some of the orders related to ensuring accountability of regulatory agencies to be “a dramatic shift in separation of powers” and a question of how to define what an “independent agency” is.

Previously, a hallmark of an independent agency was that although the president appionts its leaders, thereby having at least some stamp on it, there was no direct interference from the White House during the rulemaking process, she explained. Now, all rules will be reviewed by the Office of Management and Budget with the president to be the final arbiter. The idea, Eurgubian said, is to ensure that all regulations are in line with the White House’s aims.

“This is going to slow rulemaking down because of the additional layers of review,” she commented. And while that may sound like music to credit union CEOs’ ears, it might not always be. “I think we may see a more expansive interpretation of the Federal Credit Union Act by NCUA,” she said, noting that there are some types of regulation credit unions might prefer not to be slowed down.

Luke Martone, regulatory advisor and senior counsel for America’s Credit Unions, added that there is some support for some expansion of field of membership, as an example of something CUs would ike to see from their regulator. The problem, Eurgubian suggested, is that banks, of course, will fight such a move, so there is no guarantee the White House signs off on it.

Still another CU-friendly rule NCUA may be open to is permitting some sort of compensation for board members when, for example, they have to pay for childcare in order to attend board meetings.

For all the hullabaloo about the onslaught of executive orders that came out in the first weeks of Trump’s presidency, Eurgubian said this isn’t entirely unprecedented. “We typically know that executive orders are coming when a new president is elected,” she said, just as political appointees like herself are well aware that when a new president is elected from across the aisle, they will need to move on to make way for their successors. “We expect a lot of executive orders during the first mile and the last mile of a president’s term. So a lot of this was expected. That said, it really was a lot.”

Martone asked Eurgubian to offer some insight into potential RIF efforts at NCUA. “NCUA is very thinly staffed compared to other agencies,” she said, noting that when she worked at the Fed and there were interagency meetings, the Fed had lots of different people it would tap to attend those, but at NCUA it’s often the same one or two people representing the CU regulator.

But the first step at all of the agencies, she said, will be to look at those employees who are still in the first two years of federal service, because those are the workers who are still on probation and can be fired for no reason. Most of the examiners at NCUA have been there longer than two years, but there could be some RIFs there, she said. This likely will mean that credit unions will see their exams happen at the later in their examination cycles, she said.

Credit unions may also see the emphasis of the types of exams and rules NCUA focuses shift away from consumer protection to hone in more on safety and soundness.

While the chairmanship has moved from Democrat Tod Harper -- the first career staffer to be appointed to lead the agency -- to Republican Kyle Hauptman, Eurgubian said it is her impression that one recent hallmark of NCUA’s board is likely to remain: the spirit of collaboration.

Some previous boards have been known to be contentious, sometimes even among the majority party, but this board has been highly collaborative, she said, noting that there have been times when the sitting chair has had the votes he needed to push a particular rule out without making any concessions to someone across the aisle, but has instead chosen to seek consensus by agreeing to certain provisions or changes.

“This board has been extremely collaborative even when they don’t have to,” she observed. When asked about the possibility of rolling credit union regulation into Treasury or some other scenario in which credit unions lose their independent regulator and instead being regulated by a bank agency, Eurgubian said she didn’t think this is likely to happen, primarily because it can’t be done by an executive order, it would have to be legislated by Congress.

And it’s definitely not something she would ever advocate for, she added. “That would be really troubling for the industry,” Eurgubian said. “It has been very powerful to have an independent regulator.”

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