Credit Union Exam Solutions Presents With Flying Colors

Treichel: Hey everyone, this
is Mark Kel with another

episode of With Flying Colors.

I'm excited to be here with former
colleagues, friends, and credit union

experts John Ney and Jeff Pacino.

Guys, how you doing today?

I.

Very

well,

Treichel: thank

you.

Good.

Been a little bit of a whips
off the last couple days,

Treichel: right?

Yeah.

It's been a, it's been a wild couple wild
ride on the NCA Front Credit Union front.

And guys, if you could give a
little, I know who you are, my

listeners, who've heard you on
the show before, know who you are.

But if you could give a little
bit of your background before we

start off and who wants to start?

John or Jeff?

Go ahead Matt.

Bacion: Okay.

I worked on Capitol Hill
in the late eighties.

Worked for CUNA for 18 plus years.

First in the political affairs area and
eventually to the job of senior lobbyist.

Then in 2006, I was a appointed
Joanne Johnson, who was chairman of

NCUA at the time, brought me over as
as the head of Congressional Public

Affairs, and I happened to be there.

I would like to say during the most
the five most consequential years

in the history of the agency when we
had the the mortgage market crisis.

And then since 2011, I have been fortunate
enough to work, continue working with

credit unions as a consultant, a go
one of government affairs and advocacy.

Treichel: Very good.

And Jeff.

Bacion: I

guess my claim to fame is that
I worked with John Ney at Kuna.

I was actually the I was the first
full-time hire at Callahan Associates.

I went over to Kuna after that.

Left Kuna went off on my
own, was appointed to the

NCA Board by Bill Clinton.

Then left the board, I would say during
the golden years of credit union.

So I'll give John the most
consequential, but we had the golden

years was appointed by George W.

Bush to be on the Federal
Housing Finance Board.

And after I left there, went back to
running my own firm and we manage a

handful of credit union trade associations
and much like John, I still get to

work with credit unions in that regard.

Treichel: Very good guys.

So if we've got consequential
and we've got the golden

years, what do we call today?

On,

Bacion: on cuss.

Buckle up.

Treichel: Buckle up the buckle up.

Years.

Here we go.

So lot going on.

I if you disappeared this week and
you wonder what's going on in credit

unions, president Trump, fired Todd
Harper and Tanya Ska on Tuesday.

And by the way, we're
recording this on Friday.

Good Friday.

This will go live Monday.

And NCAA's website still says they have
three board members they've got a little,

I noticed that little catching up to do,
but yeah guys so what are you hearing?

What's going on?

What's in your head at, for these
buckle up years and buckle up days?

Bacion: Jeff, why don't
you take that first?

Because you're more you're, you have
stronger opinions than I ever do.

I

Bacion: don't know if I
have stronger opinions.

I'm the one not smart enough
to keep 'em to myself.

The first thing I think you'd have to
say out of it was that this is not, I.

Unprecedented lately.

Okay.

It's unprecedented for credit unions.

We've never had this happen where a
board member has been fired in the past.

The only time board members have
been believed of their duty has

been after their term expired.

And the ones I think about
is Bob Swan Yolanda Wheat.

I think that's probably all I
remember right now but basically

your term was over and then.

In the case of Swan, the White House
wanted to, I think it was probably Norm de

Moore wanted to get him outta there, and
so he asked the White House to fire him.

But until now, it's always
been when a term has expired.

Bacion: And j Jeff, by the way, I was
gonna add, I'm glad you jogged or memory

on that because I remember the Bob Swan
I issue and I thought that he actually

came to the office and was escorted out.

Yes.

He was, from what I remember, he was,
his term was finished, but he still had

the ability, legal ability to continue in
office until the successor's appointed.

That's what the act said.

And if I remember the White House
case, 'cause Bob did Sue and he lost

because the White House's position was,
at that time, Yolanda Wheat had been

nominated and I believe had a hearing.

I don't think she'd been
confirmed by the full Senate.

So in the White House legal
opinion at that point.

Her, his successor had been
quote unquote qualified.

Think that was the word
they used back then.

And again, you both know I'm not a
lawyer, I don't play one on tv, but

that's what I remember outta that.

So yeah, Swan was that.

But the thing now and basically
since inauguration day, you've seen

it, we've seen entire departments,
U-S-A-I-D CFPB disappear.

If you drive into DC from Virginia
now, you would pass the old U-S-A-I-D.

Office, which is in the Ronald
Reagan building, which no longer

even has the name on the wall as it
used to until about two months ago.

So these are, I said unprecedented, yet
not unprecedented with what's going on.

Trump, the Trump administration has
done the same thing with FTC the

National Labor Relations Board, the
Merit Pay Systems Board basically

taking out people that they didn't want.

And to me, I.

The reason this is consequential is
obviously because as a board member,

at least for me, in the past, it was
always assumed you served out your term.

Okay?

So we can talk about the Harper
Renomination, but for Abda it was,

Tanya had a term that ran through 2029.

And, basically was told on
Tuesday night, you're fired.

Yeah.

And so again, unprecedented times in
terms of our agency, but not unprecedented

in terms of the last three months.

Bacion: And John, I'm sorry, mark.

Go ahead.

No.

John, you go ahead.

The independent agency aspect
of this is interesting.

Although I will say, I know.

The weeks the events of the last
week have been very high wire act.

It's been dramatic in
some ways, melodramatic.

But I would also point out that
independent agencies, I'm not certain,

and we can have a semantic debate
about what independent agencies mean.

They're part of the executive branch.

Presidents have typically exercised the
ability to fire, in 2021, president Biden.

Fired the head of CFPB.

Actually, she submitted a resignation
an about an hour before she was

told she was gonna be fired.

That was the Trump appointed CFPB
head, who was dismissed by Joe Biden.

A couple weeks later, the head
of the Federal Housing Finance

Agency, mark Calabria, who was
in office for a term, was fired.

The republic did not
end when that happened.

I'm not trying to minimize or tell
credit unions that they shouldn't be.

Be on edge about some of the things
that have happened at NCA this week,

but, appointees get dismissed, and the
courts have more recently said that,

presidents have latitude to fire people.

By the way, you mentioned CFPB.

I want to interject something.

It's nothing to do with NCA,
but this morning I got a quick

update from Capitol Hill.

It sounds like CFPB is going to dismiss
all but about 200 of their employees.

Which I think brings them from about
a thousand or plus down to 200.

So that's an agency that's clearly re,
re repositioning itself under the Trump

administration, which you'd expect it to.

Donald Trump and Joe Biden, or
Donald Trump and Barack Obama are

very different creatures when it
comes to their views of government.

And that's what we're seeing this
play out is I think Trump, campaigned

on it being a change agent.

We're getting change.

Treichel: We are getting change.

And the thought on the thought of
the CFPB, 'cause I've talked about,

so I was the executive director when
NCA shut two regions and, walked

through the alternatives of what
you could consider as an agency and

a reduction in force is an option.

It didn't it wasn't a kind way of doing
things, but it's also not a really

effective way of doing things, generally
speaking, because what happens in a rif.

The highest ranking person bumps into
the next person, bumps into the next

person, bumps into the next person,
and you can get people save their pay.

You don't save a lot of money,
and at the bottom you end up

getting rid of some of the newer
people, the lower costing people.

But I hadn't thought about Arif.

So large of CFPB taking 1200
people doing it down to 200.

That way you do save money when
you get rid of five out of every

six people, nobody's left a bump.

And

Bacion: on that point, mark and Jeff you
and Mark May have a better perspective

than I do, but I have heard various
people who are currently at the agency

who speculate that upwards of 200.

To 250 people there are gonna take
an early retirement by the end of

the year, which will bring NCAA's
head count down to about a thousand.

If I'm not if I'm not mistaken.

Treichel: Jeff, I have some
thoughts on that, but why

don't you, what have you heard?

I've heard a couple things.

Obviously, the Doge influence.

Comes into play.

I had heard that what they were gonna
discuss at the board meeting that

they didn't have yesterday because you
don't have a quorum, was this I would

say buyout plan, a retirement plan.

I understood it had two major components.

The first is if you were not if you
were not eligible to retire, you

could go on administrative leave
through the end of the year with pay.

But you would leave immediately
unless you were wrapping up an

exam or something like that.

If you were eligible, retirement
eligible, you could take a lump sum check.

I understood it was five 50 grand
and then you could leave, but you

would not be on administrative leave.

You were just gone.

I do agree with both you, I think
I've heard that it, they're trying

to reduce the force by about 20%.

And then what I heard was if
they couldn't do it voluntarily,

you would do it involuntarily.

And and again, that, that takes
you down in that in 1,012 hundred.

People range

Bacion: there.

There was a Doge paid a visit to NCUA.

I think everybody it was
reported in the press.

This is not a secret.

I understand.

Last Thursday at least some, somebody
told me three Doge staff showed up.

Somebody told me four doge staffs showed
up, but whatever the number is, they

were in the building last Thursday.

I have not heard anything at
all about their findings or

conclusions or if they're reporting
to anybody at the White House.

What I did hear from an NCUA staff
person who the three of us all know

is that those, when they were in the
building, made comments about how much

empty space that they saw, and they
thought was it that they they noted

that and they apparently noted in a
way that sounded like they were gonna

make some recommendations off of that.

With the disclaimer that predictions are
hard to make, especially about the future.

Thank you, Yogi.

I'm, I wouldn't be completely surprised
if some recommendations were made

about the NCA building and use future
use of that, but I don't know what

those recommendations are gonna be.

Treichel: I've heard some,
a lot of what you just both

said, similar versions of that.

I will, I.

Heard today that they are going
to hit their 20% number that the

returns keep coming in, right?

And probably the firings of some board
members had some people go, you know what?

And John, like you said
this happens, right?

So it's it happens.

But when it happens to you, it could
make some people make that decision.

I also, I heard something similar
to Jeff on the two options.

There was the one, there was
Trump's fork in the road.

NCA has their own version of fork in
the road, and those folks are accepted.

Something that gets them through
September and they're on admin

leave and they don't have computers.

There's the second batch that had to
commit to staying till December 31st.

But leaving on December 31st, which
then allows them to get that 50 K bonus.

And then the way that I had the
agency had set up, people who are at

a capped pay get a lump sum for what
they would've earned for the year.

So they can double dip on that
if they get if they sign up for

this and stay through the 31st.

But 20% change one out of every.

Sick.

One of every five people gone.

And it's people who've been
there a long time, people with

a lot of corporate knowledge.

What's the, when the dust settles,
what is that going to look like?

And you could have people,
I was directed Reas.

There were not a lot of directed
Reas assignments at NCUA.

I was direct reassigned by Damour.

When I got a phone call from Bob
Swan, it said, mark, do what?

Do you know what's happening at the nsu, a
board meeting and how it pertains to you?

I had heard some rumblings and I was
told you're gonna there's a vote to

make you Deputy Executive Director.

What will you do if you get a
call that says you have to move?

I call, I called my wife.

We'd only been in, in Albany for a short
time, but I wanted to be an RD and I

was like, I was young and I did it.

But, so now you have all these
20% of people leaving and people

going, Hey, if this 20% leaves,
that leaves me in the top.

X percentage of experience.

I'm in this location.

I know they don't have
enough people there.

You could get not necessarily if they
hit the goal and don't have a riff,

you could get directed reassignments,
which could then say, move somebody's

cheese from Virginia to Phoenix.

That and that, obviously, and
you and I know this Mark, we,

when I was on the board the.

Rd spot in Albany opened up.

And I think I came to you and said,
look I knew that's where you were from.

The ideal thing would be that they
take into account people's wishes.

And I said ideal, because I frankly
don't think it, it always happens

and sometimes it can't happen.

At some point you need someone there.

And so I think what you're gonna
see over the next couple months

is obviously a reshuffling.

And you're right, you start
to lose a lot of that top.

Management.

You lose that brain drain of people
who have an institutional memory.

That's, to be honest, what scares
me the most, if you start losing

people, I know John saying your
praises earlier, I would do the same.

But we've got a lot of people at the
agency now that could leave and you

tack that onto the people you know,
like you that have left you've got a

handful of folks who are just quality.

People who knew the history of the
agency and the history of decisions.

And that's what I find scariest
is that you're gonna have a lot

of people who frankly may try to
reinvent the wheel at the peril of

basically credit unions and the agency.

Treichel: Yeah.

You just reminded me of a quote
I use on occasion is if you don't

know why offense was put up, you
might not wanna take it down.

Bacion: Yes.

And we're gonna see that.

I'm trying to, you guys are talking.

I think it's fascinating to hear
the specific specifics of this.

I'm trying to keep my eyes on the bigger
prize with NCA and I'm, I've been talking

to my clients about this over the last
couple days, which is, the actual.

Regulation examination, supervision
of credit unions, to me is still

the most essential thing to talk
about and to stay focused on.

And whether we have a board that can
function like it usually does, or

whether the board is able to promulgate
rules, which I don't think it will

be able to with one person, but the.

The real function that, that the public
and the financial public as well as the

industry, everybody needs to focus on
the fact that NNC a's got to continue

keeping us iron the ball when it comes
to things like safety and soundness

and the proper regulation of credit
unions and the safety of the share

insurance fund, all those things.

I think, the disruptions that
are have occurred this week at

the board level are one thing.

But let's I have a great deal of
confidence that, that the cooler

heads that prevail are gonna say,
let's make sure that function

is not disturbed in any way.

And that's the hope.

Let's hope that nothing happens with that.

And I don't see any signs.

It will, I think right now that
the board is gonna be sorted out.

If you want a look around the corner
as to what may happen, my instinct

tells me that we're gonna have
two new board members appointed.

And it may be unusual, it may be something
that still rubs a lot of people the wrong

way, and I get that, but ultimately life's
gonna go on with it when it comes to

NCA and its oversight of credit unions.

Treichel: Jeff, thoughts on that?

I think John, absolutely obviously,
every board member's ever served,

any board member that's gonna serve.

Always loves those motherhood, apple pie
and baseball words of safety and silence.

Okay.

We use that, as a mantra that
says, okay, this is what you do.

And so John's right, it, they've gotta
keep up the blocking and tackling

that there are supposed to do.

Now until a couple probably a couple
of hours ago, I probably would've

disagreed and said, I think we may be.

On a ride toward regulatory consolidation,
which scares the hell outta me.

But I think I've come to
the grips after talking to a

handful of people that I trust.

Handful of people that
are I believe in the know.

But this may be more of a these firings
may be more of kind of an overall

plan to be able to put a target on
the back of Fed Chairman Powell.

And so I think it's, I think
it's an and I'm gonna, I wrote

about this in my scene report.

You guys will be getting it a bit.

I called it the canary in the coal mine.

You fire all these people and in
a minute I would wanna talk about

the court case that decides this.

You fire all these
people if they all stick.

In other words, if they don't get
successfully challenged, then that tells

the administration you can fire Powell.

Even though he's got time left on
his term, in other words, I think the

argument would be, fired all these
other people, nobody did anything.

Courts decided we could do it.

Now I can do this.

So if that's the case, I
believe John's 110% correct.

I think we will get two new board members.

To me this whole thing is gonna play out.

Against the backdrop of, and again,
you guys know I'm not a lawyer, but

there was a Supreme Court case and.

People have heard more about
it in the last, probably three

months than they ever have before.

It's called Humphrey's
Executor versus United States.

It was a case from the
Supreme Court in 1930s.

Calvin Coolidge had appointed someone
to the Federal Trade Commission,

and when Roosevelt came in, he
didn't feel that board member was

sufficiently invested in his new deal.

And so he twice asked him to quit.

Both times.

Humphrey told him no.

So he finally fired him, took
the Supreme Court, decided nine

zero that he couldn't fire him.

Now the interesting thing
to me about that decision.

Was Supreme Court made a bit of
a change between that idea that

they were executive branch only.

Their reasoning was because they
promulgated rules that made 'em

similar to the legislative branch and
because they enforced those rules that

made 'em similar to Judicial branch.

I had an argument with a lawyer the
other day that said you can't have

a quasi-government agency, which
is what we've always called NC A.

But the reality is I think they do
duties that are beyond that now.

Having said that, that case has been
cited frequently, and it's the one that

justice Roberts cited when he allowed the
Trump administration to continue their

firing of somebody from the National
Labor Relations Board and the merit

pay system, which again, from what I've
read, signals that Roberts feels there's

enough votes or there's enough votes on
the court right now to overturn that.

So similar to things like Roe v, Wade
and some of these other things that

the court has overturned recently.

They may overturn it, and frankly, I
think if they overturn it, it opens the

floodgates to saying, you know what?

I can't fire anybody you want if I'm
the president of the United States.

Bacion: Yeah I actually took the time,
this may shock you to, to look at the

Federal Credit Union Act on Wednesday
afternoon, and what I saw was that

there is really no, there's no for cause
provision in the act like there is in

some other federal agencies like CFPB.

So I think that the, the president's
probably gonna hang his hat,

if you will, on that idea that.

I can fire these people and
don't have to give a reason, and

that's a, that's just a guess.

But Jeff, Jeff cites the case
that apparently is gonna decide

a lot of things over the next few
months as to how much latitude this

president has to dismiss people.

Treichel: And I'm sorry, go ahead.

Bacion: No I just think
it's it is and I, in.

I didn't want to interrupt you, mark, but
I want to get back to something Jeff said

about, the future and about what happens
when if there are two new board members

and the consolidation issue, which I
have, I've been all over the map on that.

So let's get to that in a minute.

Treichel: Okay.

Let's get to that.

The one thing, that Supreme
Court case, and I'm not a lawyer

I read a little bit about it.

I'm seeing some things that are
said it looks like the quote I saw

about that case said you can't fire
him for political reasons if there

were different reasons, the Supreme
Court might decide differently.

And I also, so that was percolating
in my head and then I saw on LinkedIn.

Inclusive made a comment
about you shouldn't be firing

people for political reasons.

And then Todd Harper commented on that and
highlighted that word, political reasons.

And you can argue was it a political
reason or wasn't it a political reason?

A and but if you get, this is kinda like
when you riff somebody, you're saying

you're doing it for X, y, z reason.

What did the letter say
that Harper got and.

And ska got, did it just
say, I'm relieving you?

Did it say, I'm sure it didn't say, I'm
relieving you for political reasons.

Did it say I'm removing you because you
didn't get your plan into OPM on time.

Were there things that, that you,
that the agency is living by the

contract to the union and not bringing
back people to work there, there can

be arguments that it was made for.

Business decisions, but those
business decisions could be

interpreted into political reasons.

I'm and then so the other piece of that
then, so if this is positioning for

Chair Powell and we're not attorneys,
Harper and Ska Ken Sue Masu, probably

will Sue pick one of those options.

How does this get elevated
to, in a fashion in the courts

so that it does, it, it can.

Serve as precedents for him
to take action against Powell?

Or is it just gonna
be, we wait two months?

Nothing.

Nobody's sued nobody.

Nobody got any, whether, okay.

Now it's okay to get rid of Powell.

All hypotheticals.

Bacion: Those are great questions.

I don't know if anybody has
any real answers to 'em.

I think the ball started to roll
back when the president fired the

FTC commissioners a couple weeks ago.

That's when, and that honestly,
I remember when that happened.

I happened to be with with, at that
day with somebody who was at, NCA

senior staff person, and I think we
both looked at each other and said,

that could be the opening bell for
what may happen eventually over here.

I didn't know when, and I didn't know
exactly what, but when the president

reaches into an agency like that
and dismiss democratic appointees I

thought it was highly possible that
the same thing could happen in NCUA.

And here we are.

Mark you, but

you talked about where this goes.

I think if the court, if the Supreme
Court decides, okay, you can do it.

I think that pretty much ends anything.

Now, if I'm Todd or Tanya, the what?

You have to wake up, yesterday
morning, this morning thinking

about is, do I wanna sue?

I know that's where everybody goes.

But I don't forget, that's expensive.

Okay?

When?

When we were all at NNC A, if
anybody sued nnc A, who defended

US Department of Justice, okay?

Last time I checked, department of
Justice doesn't clock by the hour, okay?

They don't really care.

When you gotta go out and hire
your own lawyer, you gotta pay.

You gotta pay money, your money.

And so the question I think they have
to the ask themselves, is it worth it?

Is it worth the time and trouble?

What I think, again, if I were in
that position, what I'd do is I'd

watch these other ones play out and
then determine what I wanted to do.

In other words, if.

FTC case or the National Labor Relations
case is if those board members are

successful, then I go back and look at it.

But again, at this point, they may
almost be throwing good money after bad.

If they start spending money for
lawyers that, that are working

on a case that may never win.

So again and the one thing I did
hear, okay, and this is again

rumor, but the three of us know that
sometimes the rumors are the most fun.

Is that one of the things that was
that was cited in the letter was that

they weren't coming to the office.

I.

Bacion: And I heard, and I heard that
secondhand the Doge people again and I

don't think this necessarily has a buried
on the board members' dismissals, but

again, the Doge commentary was lot of
empty space here and that they question

supposedly questioned how much the return
to office directive has been followed.

And if that's the case, again, I'm.

I'm cutting the, splitting the baby here.

We're talking about the board
dismissals, but we're, I'm also talking

about the future of the agency in
terms of how it functions, where it's

located, the building use, et cetera.

That to me is also an equally
fascinating topic and I think

we're gonna get some more clarity
on that over the next few weeks.

Treichel: All great thoughts.

I did hear recently.

That NCUA agencies had to report
at least weekly on how many

people they'd gotten rid of.

And under NCA's plan, it's been zero
and still is zero until people started

taking the plan that they approved late.

Okay.

You add to that, that, that.

Helpmann went from wanting to propose
Harper as Vice chair to pulling that off

the agenda in violation of the Sunshine
Act to correcting the Sunshine Act error.

Th that may have gotten the B both of
those things may have gotten nnc a's on

the attention ladder, or they could have
already been on the attention ladder.

And none of that has to do with anything.

But when you lay out a timeline of
things that have happened or not

happened at NCUA, I think it might have.

Put the target on them potentially.

Bacion: There's no such thing as a
coincidence, especially in this business.

And I think do, coming in last
week, starting to, may, may have

started the process that we saw
come to a head on Wednesday.

I wanted to ask you guys about
your thoughts on the consolidation.

'cause I've been like, Jeff, I've
been all over the map on that.

And I think when it first
happened Wednesday I got a

strong sense that the dismissal.

Maybe a first step to getting N
two A rolled into another super

regulator, whatever that means.

And that's been out in
the press since February.

People in Capitol Hill talked about a
consolidation where the O-C-C-F-D-I-C

would be moving into treasury.

People in the hill said, don't think
you're gonna be escaping that either.

'cause your regulator's
gonna be part of it.

But now, as I, as this thing
ca happened on Wednesday,

I've gotten a stronger sense.

From one person in the administration
and one person on Capitol

Hill who has knowledge, direct
knowledge of consolidation plans.

Sounds there's a realization that
credit unions and NCUA are distinct

enough that, that they shouldn't
be part of the bank matrix.

I think that's, that might be the
best news I've heard in a long time.

Treichel: That's fabulous.

Yeah, I, yeah, if it's true.

If it's true.

Jeff,

what things?

Three things make me feel better.

One is that the Treasury Secretary
has no interest in wanting to

regulate or be part of this, of a
regulatory function where he's in

charge of F-D-I-C-O-C-C-N-C-U-A-F-T-C,
whatever's left to CFPB, maybe even the

commodities Future Trading Commission.

If you have somebody who
wants to create a kingdom.

That, that would appeal to 'em.

Evidently, it doesn't appeal
to the Treasury Secretary.

Second thing is, and I've always thought
this, the way that the one, the way that

credit unions are funded by just credit
Union money led me to believe that, you're

gonna have to, Congress at some point
is gonna have to, would've to approve

merging the share insurance fund in with.

And while it sounds easy, and I
get a lot of people telling me, oh,

come on Jeff, you can do something
like that, with the stroke of a pen.

The reality is that one of the
reasons I think these discussions

that I'll gonna be having now.

Are so hel or skelter is because of the
way this administration has basically

just taken over and done things.

And Congress really hasn't
gotten involved in much of it.

And you and the three of us
know that once Congress gets

involved, things slow way down.

Okay.

All of a sudden.

We better have a hearing and we've
got a hearing with 10 people who

think it's a great idea and 10
people think it's a stupid idea.

Now we gotta start horse trading.

And this affects my and in essence, you
get a commission that's gonna study it and

they're gonna have to report back in 2028.

So I, I will say this, I think regulatory
consolidation is, if it happens,

would be the most existential threat.

To the credit union movement.

Okay.

I don't think we look and act like
we do now if we're in a regulator

with just with everybody else.

And this is one of those cases
where I can always tell people,

look, I lived through it.

Okay.

I was at the Federal
Housing Finance Board.

They merged us in with eo, the
Fanny and Freddie Regulator.

And again, I remember everything.

We were told, oh, we're gonna have silos.

There's a federal, all known bank
silo, there's a fanny silo, there's

a Freddie Silo, and it all goes
up through the director again.

Sounds great.

Everybody's equal.

No, we're not.

Okay.

Fannie and Freddie are
still 800 pound gorillas.

And I like to joke that 1600 pound
gorilla on your back if you're a

federal home loan bank and frankly,
I hate to say I was, I was right.

But looking back, that's what's happened.

The Federal Housing Finance Agency focuses
on Fannie and Freddie, and we've got these

banks, and I think if we were put into
an agency with Chase Wells Fargo, Citi.

In the end it's gonna be like,
oh yeah, don't they have a credit

union that's about that size?

And again, frankly if there was no trade
off for doing it, in other words, there's

no open field of membership and there's
no expanded business lending, why would

a credit union stay at credit Union?

If you're Navy and they tell you,
oh, you're gonna be in this new

super regulator, but you still
gotta be the same way you were.

I'm gonna say, you know
what, I'm gonna be Navy Bank.

Bacion: All good points, all.

I worry about consolidation threat too.

I, my, my thoughts of it
have changed recently.

'cause in February I got a, I
got both barrels from somebody

on Capitol Hill who said they're
looking at NCUA as part of it.

I'm actually surprised at
how I'm now starting to.

Think that maybe we're
NCA is gonna be okay.

And by the way, I heard the same thing
Jeff did about the Secretary of Treasury

saying he's not really that interested
in in being part of this, being at

the pinnacle of the super regulator.

It remains to be seen obviously,
but I think we can, I think we

might be able to survive that.

Treichel: That's consistent kind
of with what I've been thinking.

And the one thought.

I thought could be possible.

It is like a constructive conservatorship
of a credit union where N two A

wants to conserve a credit union
might conserve a credit union, but

the board is so cooperative and
staff are so cooperative, you might

as well let them run it themselves.

In this scenario, Trump in, in some
instances has said, okay, agency A,

the head of agency A is going to be
in charge of agency A and agency B.

Let's say we get to August and Halman
finds happiness elsewhere, or they

say, you know what Kyle, your terms up.

S let's have Rodney Hood, who's acting
at OCC be in charge of OCC and NCUA.

Us a a.

Consolidation, that's
not going to Congress.

A consolidation that just
has leadership for the short

term, which would be chaotic.

If someone would be, the good
thing is Hood knows credit Union,

so under that example, there's a.

Maybe light at the end of the tunnel.

Plus it has to always go to Congress and
the commission will bog that down, Jeff,

there, that, that reminds me of the,
there's no monument anywhere on the planet

to a committee and there's no monument
anywhere on the planet to a commission.

Because they just, they,
that's where ideas go to die.

And so it actually happening
is different than maybe a, a

consolidation of who's leading

Bacion: that organization.

Can I, let me just put a
postscript on what I said about

consolidation music to my ears.

Yesterday when I heard from a senate,
a senior senate banking committee

staffer, who said he had been in contact
with the White House, and this person

essentially, without prompting, said.

I think enough people around here on the
hill and in the administration realize

credit unions are different than banks.

And boy, that's, again making my week, in
the midst of all this other uncertainty,

and there is a lot of uncertainty.

I'm not trying to sound like I'm a
Pollyanna about it but maybe this is

this episode is forcing some clarity
on how we are in fact distinct

institutions that still deserve a
distinct regulator, at least I hope so.

Treichel: That's that is the
best thing I've heard all week.

No, I, again, I think it's another
one of those cases where you

have to be on the lookout for it.

Yes.

And we were talking earlier about, I.

Kind of maybe what put the target on
NCAA's back, maybe not having enough

folks back to work and things like that.

I think the other thing that may put
the target on their back is you had two

Democratic board members, a three person
board when a Republican is president,

this has happened a couple times.

Again, I get to say I was part of it.

If you're looking at it from a
strictly partisan viewpoint, if

you are the president, you may
look at it and go, wait a minute.

I won in November and I still got two
Democrats and one Republican here.

Something's wrong with this picture.

And so I think that may have also been
one of the things that kind of brought

it to the attention of the White House.

And I don't and look, I think the
fact that Rodney Hood's been at our

agency twice he obviously has very
good ties with the administration.

So you're gonna be running
things I assume through, at least

through the prism of understanding
credit unions through Rodney,

Treichel: good, good point.

John or Jeff, one of one of you talked
about, hey, eventually you anticipate

two new board members coming in.

Obviously one would be an R, one
would be a d, you'd probably run 'em

through together to get approval.

But, and then we're talking about
things going, will Tanya and

Todd Sue, how does that play out?

Does that get an audience
with the Supreme Court?

If you were to venture a window
of a timeline, what's the soonest

you, under all these scenarios
you'd see and then where credit

unions are in the pecking order.

What's the soonest you'd see
nominations go forward and what's the

latest in your eyes on this Friday?

Bacion: In Washington there are
two timeframes now and not now.

Okay.

We can, we could I couldn't even venture.

Guess I will say that a lot of the oxygen
in the room on Capitol Hill is being taken

up by this tax reform reconciliation,
supposedly, that's gonna be.

People on the hill are saying it'll be
on the President's desk by Memorial Day.

I'm not sure about that, but I think
right now there's a very little attention.

May, maybe the administration could
name people, but I wouldn't see

there any congressional action until
sometime much later in the summer.

Even then, I don't know.

The

only thing I could see that might
make it a little different is I

think almost anyone can agree that
this administration doesn't really

work like other administrations.

I'll just put that out there and if I,
not My House of Cards theory would be if

you wanna try to lock out these lawsuits,
you put people in those jobs as quickly

as possible, no matter where they are.

Which means, okay, you go through
the court case again, one of the

things I ask is, let's say you
sue, let's say they're successful.

What's the relief?

What's the remedy?

And again, let's say this thing
takes six months or a year.

Do you say to them, does the court say,
okay, you can go back and oh, by the way,

your terms now got two months left on it,
or your term's up and you get back, pay.

But I'm just saying, I, I think we all
agree we're in uncharted territories.

I think John's right.

I think the pace in
Washington is taken up by.

Issues that are much bigger, not
only tax reform, how about tariffs?

How about immigration?

There's a, you turn on the
news and it, you can go cycle

after things that are going on.

But I, as I said, my, my thought would
be if you wanted to try and head the

courts off of the past, you fill these
things with board members and all

of them quickly to the point where.

Even if the court decides, yeah, they
can come back, now all of a sudden you're

stuck with, wait a minute, you got, I
ever get somebody confirmed to this post.

What

Treichel: do you do now?

So the best defense is a good
offense, and that's what the

Trump administration seems to do.

So that's a, that's an
interesting interesting thought.

Again,

It's always amused me how people
sometimes don't understand how

this appointment process works.

Trust me and John and I have
been through it a lot and and

I haven't gone through it.

You hear people say, oh, they're
gonna, they're gonna pair somebody,

and you're like, okay, I understand
that's conventional wisdom, but the

reality is it's not always the case.

Or, they won't get that done by now.

And it, what I always tell people
is it's an inexact science.

Everyone's a little different.

And the people that talk the most
about it usually know the least, I

remember after I'd been nominated, I
heard at least eight other names of

people who already were nominated.

And again, I know I'm going
through the background check.

I know the minute that's done, the
president's gonna send my name up, and

yet you're still hearing people, oh no.

You know he's gonna get
it or he's already got it.

But I do agree that I do agree
with John that getting two new

board members is paramount.

And, but we do need to
make sure that the agency.

Keeps running

Treichel: on a day to day basis.

And on the agency keep running thing.

I've got, we talk about losing the
corporate brain losing 20% and that

is a challenge under any scenario.

But.

I was a deep selection back when NCOA was
under you can't hire because you violated

fed federal rights and their hiring rights
were taken, which is one of the reasons I

came in to be a deputy executive director.

'cause they viewed a bunch
of people as not being able

to be put into positions and.

Would've I been that selection
had that not happened?

No.

'cause I, I was new into the
executive ranks and PE so they

call that a deep selection.

There's gonna be a lot of deep
selections, there's a lot of talent

at NCUA, the dust will settle.

And as Henry Garcia once
said to me, a former a RD.

Nobody's ever ready for that
next position you think you are,

but you're gonna get punched in
the face like Mike Tyson, right?

And so there's talent, there's
high iq, there's people that

care about credit unions at NCUA
left a and as long as they're not

consolidated and can continue to do.

What needs to be done for the mission.

There, there will be a new version of
NCA with really good, talented people

that will help the industry and the
agency move forward, in my opinion.

Oh yeah.

Look, Brock Purdy was
the last player drafted.

He's a pro baller.

Mike Piazza was picked in the
last round of the Major League

baseball draft as a favor.

That was did to Piazza's
dad or grandfather.

I agree there's talent all over.

And the nice thing is that
this might allow some of it.

To rise to the top.

You do get that kind of level
where people aren't leaving Sure.

And others can't move up behind them.

Treichel: And Jeff, Caleb
Williams was picked first, and

Brock Purdy was picked last.

What I irony.

Oh, keep it up.

Bacion: Speaking of irony I got a
text, or I'm sorry, I got an email

chain the other, I guess yesterday.

Somebody.

Was talking, talked about one of
his colleagues at a league, and

this other person had been lame.

It was an email from.

Yesterday's email re dug up some email
from 2015 about how NCA needs to be

cut in half in terms of staff and we
need to cut the budgets and we need

to get this agency under control.

And the same person who wrote that
in 2015 was now saying, my God, this

is the end of the worlds we know.

And how dare they cut the, it's,
we're there, there's a tendency, I

think, that people are just never
happy no matter what happens.

We've wanted, we, the
industry collectively.

Have wanted a leaner NCUA for years,
regardless of your political posture.

We're about to get it, I think.

Treichel: Yeah and I think some
of that narrative and I talk

about it a lot here, NCA has a.

Challenge getting exams
done timely right now.

Okay.

And they just elongated their exam
cycle a little bit to alleviate that.

But then the aftermath of
that is you cut staff 20%.

So don't expect to get your exams any
quicker in the short term, but the dust

will settle, things will get better.

And again the takeaway for
me from this one is the.

The positive things you guys are hearing
about the independence of the agency

and the independence of credit unions
from another regulator, which, and that

Bacion: could be out the
window by five o'clock tonight.

It could be,

Treichel: yeah.

Yeah.

Maybe I should post this one today
instead of wait until Monday.

Bacion: This is fascinating.

I just wish I had more
clarity, but I don't,

and to be honest with you though, I
don't think anybody does, this isn't

one of those things where you could say.

Know we could do a little
more work and figure it out.

Reality is things are gonna change.

If you had told me Tuesday morning that
you were gonna have too fewer NCA Board

members on, Wednesday morning I would've
probably taken that bet against it,

and, so we're in our unchartered waters.

I get that.

But unchartered waters don't necessarily
mean that, something bad's gonna happen.

And Mark, I do agree with you.

I think that we are going to see
other talent rise to the top.

Because you get the chance.

Look let's use John's
Orioles as an example.

They got a ton of talent.

They got so much talent
in the minor leagues.

They can't get guys up to the major
'cause they're gonna be blocked, so

if you look to trade some those guys,
John, we'll take 'em at the Cubs.

Bacion: I'm sure he would.

We traded to my recently
the Cubs a couple years ago.

He won the s Young as soon as
he got out of an oral uniform.

So

anyway,

Treichel: let's just not talk, let's
just not talk about the Minnesota Twins.

What any final thoughts
on on this week of.

This week of what's happened.

Bacion: Buckle up.

Buckle up.

I say again.

That's all I can tell you.

That's my best advice.

And just try to stay calm and just
realize that change is the watch

word in Washington right now.

And it's just, this is a very
tumultuous period in a, in an

administration promised that

Treichel: very good.

And last prediction, guys.

I'm gonna say the Minnesota Vikings
are gonna go nine and eight and

we will split with the bears.

John, how about the Ravens?

Bacion: We'll choke in the playoffs again.

And Jeff?

Treichel: The Mighty Bears.

The Mighty Bears, I think.

I think the bears gonna make the playoffs.

I will put it right there.

Very good.

Very good.

Alright guys, this has been fun as always.

I enjoy chatting with you.

Good to see you.

And if we have another week like this,
we'll have another podcast like this.

Thanks here, we're here
for you if you need us.

Treichel: I know where to find you.

And listeners, I want to thank you
for listening Watchers on YouTube.

Want to thank you for watching.

I hope you'll watch again soon.

Mark Kel, signing off with flying colors.