President Trump on Thursday appointed Mark McWatters to serve as acting chairman of the National Credit Union Administration.
McWatters, who has served on the NCUA’s board since June 2014, succeeds board member Rick Metsger.
“I am deeply honored that President Trump has asked me to serve as acting chairman,” McWatters said in a press release. “I remain committed to bringing true regulatory relief to the extent permitted by applicable law and to protecting the deposits of the more than 106 million Americans who rely on federally insured credit unions for their financial needs, all in a manner that ensures the safety and soundness of the National Credit Union Share Insurance Fund.”
Beyond reasserting Republican control over the agency for the first time since 2009, the move is expected to have little immediate impact, since it amounts to a seat swap for McWatters and Metsger. Indeed, until the open seat on the three-person board is filled, Metsger can stymie any initiative McWatters puts forward by refusing to second them at board meetings. The same held true for McWatters during the nine months Metsger served as chairman.
Given that delicate balance, both men have placed a premium on collegiality. Both were quick to reaffirm their solid working relationship once news of McWatters’ appointment broke.
“I congratulate my colleague Mark McWatters on his designation, and I expect our strong working relationship to continue,” Metsger said in a press release. “He and I have mutual respect for, and trust in, one another, and I think we have accomplished a good deal in the past nine months. Our commitment to working together for a safe and sound credit union system remains the same.”
Metsger’s term expires Aug. 2. McWatters is slated to serve until August 2019.
Maintaining their bond is doubly important because several weeks could go by before the president nominates a candidate to fill the vacant board seat, according to former chairman Michael Fryzel, who advised the Trump administration on credit union issues during the transition.
Fryzel said he was “very pleased” by McWatters’ appointment.
“With his experience in the private sector and as a board member, he certainly has the ability to lead the agency,” Fryzel said in an interview Thursday.
McWatters’ selection as acting chairman gives him a “leg up” in the process to determine who will fill the job permanently, Fryzel added. “I expect he’ll wind up in the seat,” he said.
Comprehensive regulatory reform is one of the new administration’s top priorities. Both Fryzel and House Financial Services Committee Chairman Jeb Hensarling, R-Tex., said McWatters was the right choice to oversee that process inside the NCUA.
“Mark is highly capable and extremely well qualified for this role,” Hensarling said in a press release. “He brought a free market-oriented, transparent and accountable perspective to the NCUA Board. At a time when the regulatory burden of the Dodd-Frank Act has led to a drastic decline in the number of credit unions serving Americans, Mark’s leadership as Acting Chairman is greatly needed.”
Before joining the NCUA, McWatters, who is an attorney, served as counsel to Hensarling.
The credit union industry’s leading trade associations were quick to praise the choice of McWatters to lead the NCUA.
Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions, said he called with congratulations as soon as he heard the news.
“We congratulate Acting Chairman McWatters and look forward to continuing to work with him and Board Member Rick Metsger to ensure a positive regulatory environment for credit unions,” Berger said in a press release.
CUNA President and CEO Jim Nussle said that "we further welcome a continuation of the collegial and professional approach taken by him and Mr. Metsger over the past year that has resulted in significant positive changes at the agency."
Bankers, meanwhile, are unlikely to find anything positive to say about McWatters’ appointment. As a board member, he voted to approve recent controversial revisions to regulations governing member business lending and fields of membership. Both actions triggered legal challenges by bank trade associations.
