Short-Handed NCUA Board Will Likely Delay Incentive Pay Rule Until the Next Administration

Bloomberg is reporting that the Dodd-Frank Act incentive compensation rule is unlikely to be completed during the closing days of the Obama presidency due to the National Credit Union Administration (NCUA) Board being short-handed.

The article states that the opposition of NCUA Board member McWatters along with a bureaucratic quirk at the Securities and Exchange Commission (SEC) means the rule will likely be delayed until the next administration.

The Dood-Frank Act required six regulator agencies to engage in a joint rulemaking regarding incentive pay packages.

The article notes that many of these regulators are short-handed. This is particularly the problem at the NCUA, which has "one Democrat and one Republican on what’s normally a three-member board."

According to the article,

"The NCUA’s Republican, J. Mark McWatters, used to work for House Financial Services Committee Chairman Jeb Hensarling, a vocal critic of Dodd-Frank who has warned regulators not to move ahead with any more rules before Trump takes office. Though McWatters reluctantly voted in April to solicit public comments on bonus restrictions, he said at the time that people shouldn’t mistake that for support. NCUA officials have told staff members of other agencies that the credit union regulator won’t take action on the rules before Trump becomes president, said one of the people, who like others asked not to be named because the discussions were private."

Also at the SEC, the agency is down from five members to three. Were the SEC to schedule a final vote and the sole Republican Commissioner did not participate, the agency would lack a quorum to officially approve the new regulation.

Until vacancies at these agencies are filled, a vote to finalize the rule is unlikely to happen.

Read the story.