NCUA Board Nominee: Credit Unions Should Manage Climate Risks
Tanya Otsuka testifies at confirmation hearing.
Credit unions, and not their regulator, should manage the risks that climate change poses to the financial institution, NCUA board nominee Tanya Otsuka told the Senate Banking Committee on Thursday.
“Regulators are required to make sure that credit unions manage risks,” Otsuka said, during her confirmation hearing.
If confirmed, Otsuka would replace Republican Rodney Hood, whose term has expired. Otsuka, who currently is on the Democratic staff of the Banking Committee, would join Democratic Chairman Todd Harper and Republican Kyle Hauptman on the board.
It would give Democrats control of the board for the first time since President Biden took office.
Climate an Issue
Republican committee members expressed concern that Harper wants the board to take a more activist role on climate issues, with Sen. Mike Rounds, R-S.D., saying he was worried that the NCUA could press credit unions not to do business with oil businesses, farmers, and ranchers.
Asked about another Harper priority—consumer protection—Otsuka said that it also is a priority of hers.
In her opening statement, Otsuka recounted how her Japanese-American grandparents were sent to an internment camp during World War II. After their release, she said, it was difficult for them to make ends meet because, like many others, they had lost everything.
Facing discrimination from the financial services industry, some “took matters into their own hands” and formed a credit union. While she did not name the credit union, she said it still is in existence and is insured by the NCUA.
CU Trades Weigh In
In preparation for the hearing, CUNA and NAFCU sent Banking Committee members a letter outlining their priorities for the NCUA board.
In the letter, CUNA President/CEO Jim Nussle and NAFCU President/CEO Dan Berger said they are concerned that the agency’s budget continues to dramatically expand.
The two said they have significant concerns about expanding the NCUA’s consumer protection examinations, and questioned whether there is a need for such an expansion.
“As its mission statement makes clear, the NCUA exists chiefly to ensure the safety and soundness of the credit union system. Its examination program should remain focused on that primary objective,” they wrote.
And they said they are opposed to the NCUA taking any unilateral action on climate issues.