Thursday’s National Credit Union Administration (NCUA) Board meeting marked a pivotal moment in the agency’s governance, as Board Members Todd Harper and Tanya Otsuka officially returned to their posts following a recent federal court ruling.

Their reinstatement restores the NCUA Board to its full, three-member structure. Board Member Harper participated virtually, while Board Member Otsuka attended in person, seated next to Chair Kyle Hauptman during the meeting.

Board Members Harper and Otsuka were reinstated after a U.S. District Court judge ruled on Tuesday that their earlier removal by President Donald Trump’s administration was unlawful. The decision emphasized that the NCUA statute limits the president’s authority to remove board members, reinforcing the agency’s independent structure.

However, the legal matter remains unresolved, as attorneys for the Trump administration have filed a notice of appeal with the U.S. Court of Appeals for the D.C. Circuit.

While the reinstatement of board members Harper and Otsuka drew attention, the NCUA Board meeting also addressed pressing topics for the credit union industry. Highlights included updates on:

• Artificial Intelligence (AI): The briefing outlined the definition of artificial intelligence as provided in Executive Order 14179, “Removing Barriers to American Leadership in Artificial Intelligence,” and explored how AI is currently being used to enhance or streamline operations within financial institutions. It also covered findings from a May 2025 U.S. Government Accountability Office (GAO) report, which recommended that the NCUA update its model risk management guidance. After reviewing existing guidance, the NCUA determined that focusing solely on model risk management would not provide timely or sufficiently flexible guidance to address the various ways credit unions are using – or may use – AI. The agency also noted that any new requirements stemming from future guidance would need to go through the formal rulemaking process.
• Ombudsman Overview and Update: The Office of the Ombudsman presented an overview of its purpose and programs, along with a briefing on post-examination survey results. The presentation included 2024 observations, examiner feedback, and input from credit unions regarding exam procedures. Notably, 41 percent of credit unions reported experiencing excessive duplicative document requests during the examination process.
• Central Liquidity Facility (CLF): The briefing was an overview of the CLF. The briefing highlighted the benefits of membership and having access to a federally contingent liquidity provider. The board was also briefed on the CLF’s second quarter 2025 financial highlights including membership trends, investment portfolio performance, operating and budget trends, and the facilities near term objectives.

The California Credit Union League and Nevada’s Credit Unions are closely monitoring these developments in the evolving regulatory landscape. The leagues will continue to advocate for a stable and independent NCUA Board that supports credit unions’ mission to serve their members and communities.