New NCUA Board Member: 3 Reasons Why It Won’t Happen
The White House yesterday announced it would nominate Self-Help Credit Union SVP for Hispanic and Latino Affairs John A. Herrera to the NCUA board. Herrera would probably be a great board member, but the odds of him being confirmed are very slim. Here are three reasons why:
He’s a Democrat. Why in the world would a Republican-controlled Senate give Democrats control of the NCUA board? Currently, NCUA board party power is balanced between Democratic Chairman Rick Metsger and Republican Board Member Mark McWatters. I doubt the goings on at the NCUA keep Senators up at night, but it would nonetheless defy logic for Republicans to cede control of any federal agency to the opposing party.
He’s too political. Self-Help has close ties to the CFPB, reportedly meeting with the bureau to weigh in on payday loan regs. Senate Banking Committee Chairman Richard Shelby was a strong opponent of the Dodd-Frank Act and is no fan of the CFPB. He’s still angry with Democrats for refusing to attach his Dodd-Frank reform to the omnibus spending package last year. Shelby – whose chairman seat expires this year due to term limit – is unlikely to give Democrats anything before he leaves, especially if someone with CFPB ties is involved.
EXIM could still move. Shelby has said all year he will push for Dodd-Frank reform during the lame duck session. Democrats have stood firm against rollbacks to Dodd-Frank, but they have also been howling for Shelby to move on confirming McWatters to the Export-Import Bank board. So, maybe there will be a closed door deal in which Democrats bend on Dodd-Frank in exchange for a fully functioning EXIM Bank. I think that’s unlikely, because the power the business community holds over elected officials is the threat they’d have to shed American jobs without EXIM funding, and that’s not much of a threat after the election. Nobody wants to see jobs lost right before Christmas, but unfortunately, Americans have poor memories and would probably forget about it by the next election. Still, if such a deal went down, and Herrera was confirmed, that would leave the NCUA board with two Democrats. Again, that would leave too much power in the hands of Democrats.
You can’t blame the White House for trying. Most pundits say it's a long shot Donald Trump will win the presidential election, but then again, Hillary Clinton isn’t a very strong candidate and everyone has been underestimating Trump since he entered the race. Nobody thought George W. Bush could beat Ann Richards in the 1994 Texas governor’s race, and look how that turned out. Should Trump win in November, it’s likely the third NCUA board member will be a Republican, so it makes sense Democrats would try to stack the deck while they control the White House. Thanks to checks and balances, however, Herrera looks like a stalemate.