www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

Federal credit unions are limited to investing 1% of their assets, in the aggregate, in credit union service organizations. That number went into the Federal Credit Union Act in the 1970s, and when NACUSO went back and researched it, they found no legislative history explaining why 1% was chosen. It is, as NACUSO general counsel Brian Lauer puts it, truly an arbitrary number — and it is now colliding with the capital requirements of artificial intelligence, cryptocurrency, and stablecoin.

In this episode, Mark Treichel is joined by Brian Lauer, general counsel to the National Association of Credit Union Service Organizations (NACUSO) and a partner at Messick Lauer & Smith P.C., for a wide-ranging conversation on where CUSOs stand and where the rules governing them are headed.

Brian explains why NACUSO has shifted from a defensive posture on Capitol Hill — largely a response to NCUA’s push for vendor authority — to an offensive one. Over roughly the last 18 to 24 months the association has been on the Hill four times and returns in September, as its own organization rather than as part of an industry fly-in, pushing for changes to the Federal Credit Union Act that would eliminate the 1% cap and let credit unions manage CUSO investments on a balance-sheet-by-balance-sheet basis, the same way boards already manage capital above the statutory prompt corrective action floor.

The conversation also covers a second statutory issue that gets less attention: the "primarily serves" limitation. As Brian describes it, "primarily serves" is not a limitation on investment powers in the Act, but when NCUA wrote the modern CUSO regulation in the 1990s it conflated investment and lending and applied the standard to both. The practical effect is that a credit union asking for a strategic seat at the table with a technology company has to tell that company half its business must be with credit unions — and the company is usually the one that walks away.

Elsewhere in the episode: why NCUA’s CUSO numbers are unreliable, with the most recent registry list dating from 2024 and no verification of the self-reported data, even as Brian’s own practice forms 30 to 40 CUSOs a year; the consolidation and acquisition activity now visible in the CUSO space, including third-party vendors buying CUSOs that fit their lanes and regional CUSOs merging across geographies; and what a one-member NCUA board does to the regulatory pendulum — faster swings, Brian argues, with less compromise built in.

The episode closes on the GENIUS Act. CUSOs are named in the legislation, which Brian calls a real win, and federal credit unions that want to issue a payment stablecoin will need to do it through a CUSO. He makes the case that credit unions need a stablecoin of their own for the same reason they needed shared branching, that the only way it works is through collaboration among a large group of credit unions — he estimates closer to 1,000 than 100 — and that adoption will likely be slower than the conversation suggests, with the payments side mattering most. Mark adds the argument that moved him from skeptic to something closer to convinced: if stablecoin helps keep the dollar the world’s reserve currency, that is a reason to want it developed here rather than somewhere else.

Brian can be reached through his firm at cusolaw.com and on LinkedIn. NACUSO’s annual conference is in Las Vegas in the spring of 2027, and the association also runs the VentureTech event for credit unions focused on technology.

Concise version — social and discovery

Federal credit unions can invest only 1% of assets in CUSOs. That number went into the Federal Credit Union Act in the 1970s, and there is no legislative history explaining where it came from.

Brian Lauer, general counsel to NACUSO and a partner at Messick Lauer & Smith P.C., joins Mark Treichel to explain why that arbitrary ceiling now matters more than it ever has — and what NACUSO is doing on Capitol Hill about it.

Inside the episode: the 1% cap and the campaign to remove it; the "primarily serves" limitation that keeps credit unions out of strategic fintech investments; why NCUA’s CUSO count cannot be trusted; CUSO consolidation and acquisition activity; what a one-member NCUA board does to the pace of regulatory change; and why any credit union stablecoin under the GENIUS Act will have to be issued through a CUSO — and will only work through collaboration.

The Examiner's Guide and National Supervision Policy Manual (NSPM) govern how NCUA examinations work. In this episode, Mark Treichel, Todd Miller, and Steve Farrar explain what credit unions need to know about both documents.  Key takeaways:  • The NSPM standardized examination procedures after years of regional inconsistency  • The Examiner's Guide is de-emphasized but its reference sections remain useful  • Credit unions should review NSPM chapters on District Management, Programs, and Regulatory Waivers  • Administrative action responses and appeals typically require action within 30 days  • Some Examiner's Guide chapters referenced by the NSPM aren't publicly available  This episode is essential listening for credit unions preparing for examinations or navigating enforcement actions.

For the first time in its history, the National Credit Union Administration (NCUA) has zero board members. Not one. Not two. Zero.

In this emergency episode, Mark Treichel walks through how the agency got here and, more importantly, what it means for credit unions in the meantime.

Kyle Hauptman’s six-year term expired in August 2025. Under the Federal Credit Union Act, a board member may keep serving after a term expires until a successor has qualified — which is why Hauptman was able to serve a full year past his expiration date. On August 7, 2026, the Senate confirmed John Crews. Three days later, Hauptman resigned and took the oath for his new post at the Public Company Accounting Oversight Board (PCAOB). Crews has been confirmed, but he has not been sworn in — and confirmed is not the same as seated.

The finish line is the oath of office, and the oath cannot happen until the commission comes over from the White House with the President’s signature. That paperwork routes through NCUA’s Sensitive Compartmented Information Facility (SCIF), to the general counsel and chief of staff, and then to a swearing-in ceremony in the NCUA boardroom. Until that happens, the seat is unfilled. Mark’s argument: the gap was entirely avoidable. The statute let Hauptman stay. He left anyway.

The agency does not stop, because NCUA’s delegations of authority were built for exactly this kind of situation. Mark treated the delegations as his operating bible during his 33 years at the agency, and he walks through what they cover and what they do not.

What keeps running: examinations and supervision on the normal cycle, findings, Documents of Resolution (DORs), Letters of Understanding and Agreement (LUAs), temporary cease-and-desist orders at the regional director level, charters, and mergers.

What stops: rulemaking. Conservatorships and liquidations, which sit with the board. Asset guarantees. Loss resolutions above the delegated dollar thresholds. Appointments, removals, and promotions of senior personnel. Budget changes beyond a narrow reprogramming authority. And appeals that have reached the board level — the last rung of the appeal ladder is dark until a member is sworn in.

Mark also addresses the argument some are making that a standing continuity delegation lets the executive director step into the board’s shoes. His read: that delegation contemplates a national emergency in which the sitting board members are unable to serve. This is not a national emergency. This is unsigned paperwork — a different thing entirely, and not a basis for staff to exercise authority the Act reserves to the board.

Also covered: the quorum question hanging over the 11 final regulations issued just before the departure; the ongoing Todd Harper and Tanya Otsuka litigation and what a win would mean; the Schedule C shuffle underway in the chairman’s office; and what an incoming single-member chairman faces walking into an agency that has already lost a large share of its most experienced staff.

This is a short-shelf-life episode by design. It may be resolved by the time you hear it. The structural lesson will not be.

Credit Union Exam Solutions is a team of former NCUA executives and examiners who help credit unions prepare for, manage, and appeal examinations. 

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

Ryan Donovan, CEO of the Council of Federal Home Loan Banks, joins Mark Treichel to walk through what came out of the first Federal Home Loan Bank oversight hearing in 15 years — and what credit unions should take from it.

The Federal Home Loan Bank System is not a well-known system, as Ryan puts it, so the testimony started with education: 11 banks serving 6,300 members — credit unions, banks, insurance companies, and community development financial institutions (CDFIs) — providing liquidity so those members can serve their own members, customers, and communities.

On credit unions specifically, membership growth continues. A substantial portion of credit union assets is already inside the System; by member count, there is still room to grow among smaller institutions.

Ryan explains the regulatory ask that matters most for liquidity managers: when regulators look at the liquidity coverage ratio and similar measures, Home Loan Bank advances should be treated as core liquidity, reflecting the System’s reliability across its history. Those conversations have begun with the FDIC and will extend to the other member regulators, including the incoming chairman of the National Credit Union Administration (NCUA).

He also draws the distinction credit unions sometimes blur: the Federal Reserve has limited lending authority — overnight lending, with limits on consecutive days and on days borrowed within a set period — while the Home Loan Bank is a daily liquidity provider, with its nexus to housing sitting in the collateral members bring, whether mortgages they originated or bought or mortgage-backed securities they hold.

On interoperability — one of the two hard-to-pronounce words of the hearing, alongside countercyclical — Ryan describes the work that came out of the March 2023 lessons learned: encouraging members to establish and periodically test discount window lines, improving Fed and Home Loan Bank communication so the right people can reach each other at 6:00 on a Friday, negotiating master subordination agreements so collateral can move faster in a crisis, and proposing that the Fed accept a Home Loan Bank letter of credit on behalf of a member in stress to bridge from Friday’s close to Monday’s open. Mark connects this directly to staff turnover, including the roughly 27% of NCUA staff lost to buyouts, and what that does to a call tree.

On housing, the banks are required by law to set aside 10% of the previous year’s net earnings for the Affordable Housing Program (AHP). For the last two years they have contributed 50% more than required, putting more than $1 billion a year toward affordable housing. Ryan is candid about AHP’s burden — 13 FHFA regulations and six advisory bulletins — and notes that FHFA under Director Pulte is overhauling it. He contrasts AHP dollars committed with voluntary program dollars already out the door, and warns against any change to the 10% statutory floor that would crowd out voluntary programs.

The conversation closes on CDFI membership, low income housing tax credit (LIHTC) collateral that is reliable but hard to value, the subsidized programs Chicago, Boston, and Cincinnati run, H.R. 7647 and the community financial institution definition, and why insurance companies belong in the System at all.

In this archive episode of With Flying Colors, host Mark Treichel welcomes Vin Vitton, retired NCUA Senior Credit Specialist and longtime commercial banker, for an insightful discussion on credit culture—what it is, why it matters, and how it shapes a credit union’s lending success.

Vin draws on his unique experience working on all three sides of the desk—as a lender, borrower, and regulator—to explain how a strong credit culture begins with board values, flows through management, and guides every credit decision. Together, Mark and Vin unpack key takeaways including:

• The definition and purpose of credit culture within a credit union.
• How board values and management philosophy shape consistent lending practices.
• The importance of reading regulatory preambles to understand NCUA’s intent.
• Why every policy, system, and training program should reinforce a consistent credit approach.
• How examiners and credit unions can align on “the art” of evaluating risk rather than relying on “paint-by-number” regulation.
• The role of appropriate structuring, documentation, and open dialogue with examiners.

Whether you’re a CEO, board member, or senior lender, this episode provides valuable insight into balancing safe and sound lending with member-focused service.

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

 In this episode, Mark Treichel sits down with Lenwood Brooks — former chief of staff to NCUA Chairman Rodney Hood, former Director of Government and Industry Relations at the Federal Home Loan Bank of Dallas, and now a managing director at Performance Trust Capital Partners — for a wide-ranging conversation about what happens to NCUA next.

Lenwood walks through the mechanics of Senate confirmation for nominee John Crews, including why the shift to en bloc cloture votes has compressed a process that took Kyle Hauptman four or five months down to a matter of weeks. He explains why confirming Crews is a step toward resolving the quorum question but not the resolution — the agency stays under what he calls a gray cloud until the board reaches at least two members or a court rules.

The conversation then turns to what recent removal-power litigation means in practice. If the reasoning in the Federal Trade Commission case holds, the six-year NCUA board term no longer functions as designed. Board seats become tied to a presidential administration, and Lenwood’s advice to credit unions is direct: prepare for the NCUA to run a lot more like the Office of the Comptroller of the Currency, with drastic swings in supervisory priorities between administrations.

Mark and Lenwood also cover what it is like to arrive at NCUA as a political appointee amid an experienced career staff, why career staff become a force multiplier once they trust you, the trend of NCUA board members coming out of Senate Banking Committee staff rather than from credit unions, and the balance sheet lesson from March 2023 — that chasing yield and duration alone gives you a single-dimension picture of a multi-dimension problem.

Finally, Lenwood offers the observation credit union leaders will recognize immediately: examiners often do not appreciate that a passing comment can set off a fire drill in the C-suite that takes weeks to resolve. A whisper from an examiner comes across as a yell.

Reach Lenwood Brooks at [email protected]. For help preparing for your NCUA examination, responding to a Document of Resolution, or navigating the appeals process, contact Credit Union Exam Solutions at marktreichel.com.

Why Does NCUA Ask to Meet with CU Board without CU Staff Present?

Join Mark Treichel and his team as they delve into the rare but important topic of why the National Credit Union Administration (NCUA) might ask to meet with a credit union's board of directors without staff present. In this episode, Mark, Steve Farrar, and Todd Miller share personal experiences and insights from their extensive careers in credit union examination and supervision. Learn about the reasons behind such requests, how to handle these meetings, and the implications they might have for your credit union.

  Guest Introductions
 Steve Farrar's Background
 Todd Miller's Background
 Increasing NCUA Board Meetings without Staff
 Board Chair vs. Full Board Meetings
 Meeting with Specific Board Members
 Supervisory Committee Conversations
 Handling Full Board Meetings without Staff
 Considerations for Board Responses
 Recording Meetings and Legal Counsel
 Emotional Responses and Agreement Caution
 Conclusion
 

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

State-level interchange legislation is no longer a one-state story, and a federal preemption ruling has left credit unions on opposite sides of a line they did not draw. Mark Treichel, former Executive Director of the National Credit Union Administration (NCUA), talks with Jason Stverak, Chief Advocacy Officer of the Defense Credit Union Council (DCUC), about where interchange fights stand, what the NCUA board vacancies mean heading into budget season, and why every credit union should have a government shutdown plan ready before the end of September.

Interchange at the state level

Massachusetts convened a commission to study interchange and has taken input from retailers, credit unions, card companies, and processors across multiple hearings — Jason testified at the third. Illinois passed an interchange law that has been delayed a year and is now in the courts. A federal judge, relying on the Office of the Comptroller of the Currency (OCC) position on federal preemption, ruled the law does not reach card networks, federally chartered banks, or other federally chartered savings institutions — but does reach federally chartered credit unions, state-chartered credit unions, and state-chartered banks. The NCUA has since moved on an interim rule extending the same exemption to federally chartered credit unions, with the comment period recently closed.

That leaves state-chartered institutions carrying a compliance burden their federally chartered competitors do not. Jason's concern is structural: the strength of the credit union movement has always been the dual charter system, and a rule that effectively tells institutions to change charters to escape paperwork erodes it. Colorado's legislature passed an interchange bill that the governor vetoed; the issue has been introduced in a number of other states and in Puerto Rico. As more states pass their own versions, credit unions face the prospect of multiple interchange payment networks — and members who care about one thing only: whether the card works where they are.

Marshall-Durbin in Washington

The Marshall-Durbin interchange legislation remains contained, but not dead. DCUC is watching the National Defense Authorization Act (NDAA), floor amendments, and any must-pass vehicle that could carry it. Jason's framing: the worry is not a fair fight, it is a provision slipping into a bill at two in the morning in December.

For defense credit unions, the stakes are specific. Interchange revenue funds the ability to extend credit to eighteen-year-old service members with no credit history — a $1,000 card to fix a car or buy groceries until payday. Take that away and the alternative is the payday lender outside the front gate.

The NCUA board

Chairman Kyle Hauptman is set to depart. John Crews has had his nomination hearing. As of August 1, Hauptman will have served a year past the end of his term. The Senate has roughly three weeks before its August recess, and the practical hope is that a nominee package moves — or that Crews is processed individually before the August 6 recess. Mark's point from the Executive Director's chair: get him seated in August, because the budget is coming, and a new board member approving a budget in his second month is not the scenario that produces an optimal budget.

Separately, Todd Harper and Tanya Otsuka are proceeding with their court case following the Supreme Court's decision in Trump v. Slaughter, which gave the president broad removal authority over independent agency heads with the Federal Reserve excepted. Their argument is that Slaughter is specific to the Federal Trade Commission. The case sits in the D.C. Circuit and may or may not resolve this year.

Coast Guard pay and shutdown readiness

The Coast Guard is part of the military but is funded through the Department of Homeland Security (DHS), not the Department of Defense, absent a declared war. During the shutdowns, that meant Coast Guard members went unpaid. Credit unions filled the gap — Keesler Federal Credit Union committed its reserves to cover member paychecks; others set up food banks. Jason notes the balance-sheet reality: money going out increases, money coming in decreases, and examiners will see the reserve position. He credits the NCUA for working with credit unions through it.

Looking ahead: no spending bills have been signed, and funding runs out September 30 at midnight. DCUC has already told its members to dust off their shutdown plans, because by mid-September members will be asking about mortgages and tuition, and members of Congress will be asking what programs are in place.

Jackson Area and the banking trades

On the alleged fraud at Jackson Area Federal Credit Union, both agree the issues are serious and warrant investigation, and that the industry should lead on governance, board training, and internal controls rather than wait to be led. What draws Jason's objection is the speed with which the banking trades pushed the story into congressional inboxes as evidence of an industry-wide problem, paired with the familiar asks: hearings, Form 990 filings, tax status. Mark adds a point from the record — the October 2025 Federal Deposit Insurance Corporation (FDIC) Inspector General report on Pulaski Savings Bank, a $45 million institution with two sets of books and a loss in the range of $28 to $30 million, a larger percentage loss than Jackson Area. Both push toward the same conclusion: identify the problem, fix the problem, and ask the board-level questions — why can one person control both inflow and outflow, and are we getting the audit we should be getting rather than the audit we are required to get?

About DCUC

Now in its 63rd year, DCUC was created as a council under CUNA to represent credit unions on military bases and has expanded well beyond them. Membership is open to any credit union — teacher, firefighter, oil and gas, and traditional charters are all in the mix. Dues are capped at $22,500 for the largest institutions, and the vast majority of members pay less than $1,000. The annual meeting runs August 3–6 in Aventura, Florida, with regional sub-councils bringing programming closer to members who cannot travel.

Reach Jason Stverak: [email protected]

Learn more about DCUC: dcuc.org

Credit Union Exam Solutions helps credit unions prepare for NCUA examinations, respond to Documents of Resolution, and navigate regulatory challenges. Learn more at creditunionexamsolutions.com.

All models are wrong. Some are useful.

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

Credit union acquisition activity in 2026 tells a story the headline numbers hide. Only four or five bank purchases have been announced so far this year — but according to Michael Bell of Honigman LLP, that is not a slowdown. It is a market in which banks are bidding more aggressively than ever, and credit unions are losing more bids than they win. Bell argues that outcome is actually evidence against the banking-lobby claim that credit unions overpay and compete unfairly: if credit unions were routinely overpaying, they would not be finishing in second place on roughly ten strong bids in the last few months.

Mark Treichel talks with Bell and his Honigman partner Justin Gingerich about the full range of credit union non-organic growth: whole-bank purchases, bank branch deals, and — newer — the acquisition of mature CUSOs by large credit unions bringing services in-house. They dig into state-level friction, including Washington State’s tax law that Bell says has raised zero revenue while shutting down credit union bidding there and depressing bank valuations, and the parallel dynamic in Tennessee.

The conversation turns to the biggest shift of all: credit union to credit union mergers of equals (MOEs). For most of Bell’s 23-year career these barely happened. Now he is having new MOE conversations weekly, and once a letter of intent is signed, roughly eight of ten close. Gingerich walks through the Wings/Ent transaction — a merger creating an institution north of $10 billion that won NCUA approval in four to five months, a timeline he calls unheard of — and credits Honigman regulatory partner Brandy Bruyere for navigating a process he describes as “baking a cake when the recipe is only half written.”

Treichel adds the regulator’s view: NCUA honors the democratic member-vote process when disclosures are sound, and with roughly 30% fewer staff after retirements, deal teams are effectively re-educating the agency as volume rises. The takeaway from both guests: strategic non-organic growth is now a mainstream lever for institutions building 2027 strategy — and sticking your head in the sand is not a strategy.