The National Credit Union Administration (NCUA) Board held its monthly meeting on May 22, with Chair Kyle Hauptman serving as the sole board member in attendance.

This marks the first public meeting since the abrupt termination of former Board Members Todd Harper and Tanya Otsuka by President Donald Trump in April, which also led to the cancellation of the April board meeting.

Share Insurance Fund Quarterly Report

Chair Hauptman received a briefing from NCUA staff on the status of the National Credit Union Share Insurance Fund (NCUSIF), which included updated financial and statistical data. Notably, the fund’s reporting has transitioned to a new dashboard format, which will be made publicly available on the NCUA’s website.

Key highlights from the briefing include:

• Net Income: The NCUSIF reported $79.8 million in net income for first-quarter 2025, an increase of $1.2 million (1.5 percent) over fourth-quarter 2024 and $11.7 million (17.2 percent) over first-quarter 2024. The rise was primarily due to $3.3 million in lower operating expenses, partially offset by a $2.4 million increase in provision for insurance losses driven by changes in corporate legacy asset valuations.
• Total Assets: The fund’s assets increased to $23 billion.
• Equity Ratio: As of December 31, 2024, the equity ratio was 1.30 percent, up 2 basis points from June 30, 2024. However, staff projects the ratio will decline to 1.26 percent by June 30, 2025, largely due to projected insured share growth of 5.3 percent year-over-year.
• Credit Union Failures: There were no credit union failures during first-quarter 2025 that resulted in a loss to the NCUSIF.
• Loss Absorption Capacity: As of March 31, the NCUSIF could withstand up to $1.3 billion in losses without falling below the 1.20 percent statutory threshold that would trigger a restoration plan.

NCUA’s Voluntary Separation Program

NCUA Executive Director Larry Fazio and Deputy Director of the Office of Examination and Insurance Amanda Parkhill provided an update on the agency’s Voluntary Separation Program (VSP), initially scheduled for discussion during the canceled April meeting.

The VSP responds to Executive Order 14210, signed in February 2025, which directs federal agencies to significantly reduce staffing. In March, the NCUA Board approved the VSP to incentivize voluntary departures as a more cost-effective and less disruptive alternative to an involuntary reduction in force.

Key points:

• Headcount Reduction Goal: The NCUA aims to reduce its workforce by 20 percent — approximately 250 employees — by the end of 2025. To date, 152 employees have entered the Deferred Resignation Program (NDRP), including more than 40 from the Western Region (as noted during the League’s April meeting with Western Regional Director Julie Cayse). The remaining NDRP participants will start their administrative leave in the weeks and months ahead.
• Operational Adjustments: The NCUA is streamlining operations by eliminating low-value tasks, updating regulations, modifying exam policies, and revising office procedures.
• Exam Flexibility: Regional directors now have authority to extend the exam cycle for well-run, low-risk credit unions.
• Employee Engagement: Staff have been actively involved in developing efficiency improvements and assuming new responsibilities in higher-priority areas. The agency emphasized that reassignments are about resource prioritization — not capacity shortfalls.
• Program Timing: Under the VSP, participating employees may leave the agency at any time but must depart no later than December 31, 2025.

Fazio also emphasized that the NCUA is managing this year of transition effectively and that the agency remains fully operational.

Chair Hauptman’s Closing Remarks

Hauptman closed the meeting by affirming that the agency is functioning effectively, even with a single board member, thanks to the support of dedicated NCUA staff.

He reiterated the agency’s top priority remains the safety and soundness of the share insurance fund.

Legal Challenge from Former Board Members

Hauptman’s comments came amid ongoing litigation by former Board Members Todd Harper and Tanya Otsuka, who have sued the federal government, challenging their terminations as unlawful. The suit seeks their reinstatement and to nullify any actions taken by the NCUA under a single board member.

Key legal arguments by Harper and Otsuka:

• Their termination violates the 1978 restructuring of the NCUA, which replaced a single administrator with a three-member board structure.
• The NCUA board’s structure requires good-cause removal protections, and the government has not justified disregarding these constitutional safeguards.

The U.S. Justice Department (DOJ), representing the government, has argued that the Federal Credit Union Act does not restrict president’s authority to remove board members. The DOJ’s final reply is due May 23.