NCUA Chair Issues Policy Statement on Regulation by Enforcement

NCUA Chairman Kyle Hauptman recently issued a statement on the agency's No Regulation-by-Enforcement Policy, affirming that enforcement actions should never set or clarify policy. Hauptman identified this as one of his priorities when he was designated Board Chair in January.

The policy statement asserts that "regulations-by-enforcement is unethical and not permitted at the NCUA."

Key Principles of the Policy

The statement outlines several guiding principles:

• Enforcement actions shall only occur in the case of clear and significant violations of law or regulation
• No enforcement action, nor the timing of enforcement actions, shall be motivated by trying to boost the agency's enforcement totals or get the enforcement done in a certain fiscal or calendar year.
• Enforcement is a tool to ensure credit unions operate safely and soundly and in compliance with laws and regulations, it is not to be used as a metric of success.
• Avoid double standards by extending the same fairness and procedural protections to credit unions that civil servants receive in their own careers.

Hauptman emphasized that when the NCUA identifies emerging practices or risks not addressed by current law or regulation, the appropriate course of action is rulemaking or another formal remedy.

Read the entire policy statement