NCUA Chief Speaks; CFPB Pick Quizzed; FHFA Nominee's Social Media Wars
Capitol Account: Free Weekly Edition
Sponsored by MFA, the trade association for the global alternative asset management industry.
Another week, another torrent of news in financial regulation. The Senate Banking Committee held a confirmation hearing that included Donald Trump’s nominee to lead the CFPB. Unsurprisingly, the potential demise of the consumer bureau dominated the discussions. There was plenty of court action involving the agency as well, as its supporters try to constrain Russell Vought, the acting director.
The SEC was also busy — dropping one of Gary Gensler’s major crypto enforcement cases and outlining a new policy on meme coins. Acting Chairman Mark Uyeda also previewed some likely new rulemaking efforts, designed to make it easier for companies to raise money in both the private and public markets.
We also took a look at the online battles of Trump’s choice to head the FHFA. He’s had run-ins with people of all stripes, ranging from a prominent Wall Street executive to a Texas hairstylist. The tweets, however, no longer appear on his X account. For our regular Friday interview, we spoke with the new chairman of the NCUA, the overseer of credit unions.
Thanks for reading our digest of articles published this week. To stay on top of the news, click the button below and subscribe to the daily newsletter.
Friday Q and A: This is a singular moment to be in charge of a financial regulator. In just five weeks, the president has issued a flurry of orders to federal agencies, calling on them to reduce their staffing, bring employees back to the office and start running all their major actions through the White House. The very idea of an “independent agency” has been called into question.
This week, we sat down with one of the new Trump administration officials grappling with those directives. Kyle Hauptman was tapped by the president soon after the inauguration to head the NCUA, where he’s been on the board since 2020. The promotion doesn’t exactly mean he’s fully in charge: The other two members are both Democrats, putting him in an unusual spot. Still, Hauptman is no stranger to jobs that come with challenges. His office decor includes a frame preserving two of his old business cards, one from Lehman Brothers where he worked until 2008 and another from Mitt Romney’s ill-fated campaign for president.
Hauptman’s response to Trump’s executive orders is pretty simple. He plans to comply. But he also explains how the credit union overseer’s track record is a bit different than other financial watchdogs. Read on for his thoughts on being a minority chairman and what that means for his policy priorities in the months ahead. One top goal: stamping out regulation by enforcement. What follows is our (lightly edited and condensed) conversation.
Capitol Account: How do you describe the NCUA for people who don’t know what it is?
Kyle Hauptman: When I’m at conferences, like with fintech, I say it over and over again: `You know what the FDIC is for banks?’ It's like that, except that we insure about 4,500 credit unions – and are the regulator for about two-thirds of those…The rest are state chartered. There's about the same number of credit unions and banks in America…but there's 10 times as much money in the bank system…There's no such thing as a trillion dollar credit union.
CA: How did you get into this job? You worked in finance earlier, and then on Capitol Hill.
KH: I'm a career switcher, and one of those people who is finally doing what they should be doing. I was a bond trader for years. I was mediocre at it…My first love was always policy and politics.
CA: You were working at Lehman Brothers when it filed for bankruptcy in 2008? Did that drive you back to Washington?
KH: Being at Lehman during the collapse reignited my interest in policy, [by seeing] just how D.C.-dependent those final weeks and months and days were.
CA: You’re now the chairman of a three-person board, with the other two members being Democrats. How are you approaching it?
KH: This place wasn’t all that partisan to start with, but it definitely changes some of my priorities in terms of what's feasible. There's some internal things that I think we can get done. I've noticed with all the executive orders, talking to other agencies, that some of them vest a lot of power in the chair. [The NCUA] is more board-centric.
CA: How are you handling Trump’s executive orders?
KH: We're just going through them one by one, complying. Not trying to get in the news.
CA: One of the directives tells independent agencies to run their rules through the OMB. Some people have described that as a sea change. How do you assess it?
KH: My plan is to comply…My guess is for the short term, the administration would probably like any rules that I put through. On the other hand, I don't know, given [that] I'm a minority chairman, there will be particularly impactful rulemakings happening or ones that would be controversial.
CA: This is the first week workers at NCUA are back full-time. What are you hearing?
KH: It's definitely a change for some because, outside of the Covid period where the office was literally locked…anybody who wanted to be in the office always could. So [the return] would only affect those who obviously didn't want to be.
CA: Do you think you're going to lose people?
KH: Possibly…I don't have any data yet.
CA: What's your view on how NCUA fits in with the administration's broader push to streamline the administrative state?
KH: At least at the financial regulators, there's a perception [that] some of them got out over their skis versus what they were statutorily required to do. We are above all things an insurer. So as an insurer, we don't have any incentive to do [things like] regulation by enforcement.
CA: What do you mean by that?
KH: We have no interest in having credit unions have reduced capital, which is what would happen if you fine them $50 million for something. They may deserve it, but they're down $50 million in capital. That's the same as $50 million of loans that went bad they had to write off. Some of the problems I think the administration is trying to root out were less of an issue here.
CA: Industry has spent the past four years complaining about the Biden financial regulators taking an enforcement-first approach. Do you see that changing now?
KH: There [are] two kinds of regulators: honest ones and ones that do regulation by enforcement…Myself, and I know some of my new colleagues who are running other regulators believe that in America, the sequence of events is: Write rules, then enforce them…(Friday)
Click here to subscribe and read the rest of the interview.
Stealing the Spotlight: It was largely the Jonathan McKernan show at the Senate Banking Committee. The CFPB director nominee pretty much sailed through his confirmation hearing, parrying Democratic attacks and basking in praise from Republicans who touted his credentials and plans to “right-size” the agency.
The smooth performance left the consumer bureau’s supporters reaching for colorful analogies (and frequently citing Elon Musk) to underscore their contention that McKernan is likely to be a figurehead at best. “It kind of feels like you’ve been lined up to be the No. 1 horse at the glue factory,” Elizabeth Warren observed.
“You’re going to be placed in a very difficult position,” noted Jack Reed. He pointed out that Trump wants to eliminate the bureau. McKernan, the senator added, may not even have a place to work since the administration has already moved to cancel the lease on the agency’s Washington headquarters. “I have this sinking feeling that you are departing Liverpool on the Titanic,” Reed concluded. “So good luck.”
Moderate Mark Warner (who acknowledged that he’s “notoriously viewed as way too pro-bank” by his Democratic colleagues) pressed the theme as well. He wondered if McKernan would be “able to stand up” to OMB director and current acting CFPB chief Vought, or Musk and his “DOGE bros.”
“I’m going to enforce the law, that’s my commitment to you,” McKernan responded. “I think my record speaks to my willingness to assert my point of view. I’m no shrinking violet.”
McKernan didn’t offer too many specifics or policy ideas during his testimony. In fact, Vought has taken such a scorched-earth approach to the bureau that Democrats spent much of their time simply confirming that the nominee would follow the law and keep the lights on. Nor did McKernan distance himself from some of the disruptive changes that are already underway, including staff cuts.
“I think there are ways to right-size, the size, the efficiency of an organization,” he told the panel. And he didn’t quibble with Vought’s decision not to accept the bureau’s next budget allotment, saying that the move was within the authority of the director. “We are going to have to let the courts decide that, but I don’t see a legal issue there,” McKernan said.
While CFPB questions dominated the hearing, McKernan was at the table with three other nominees: Bill Pulte to lead the FHFA, Stephen Miran to head the White House’s Council of Economic Advisers and Jeffrey Kessler to be an under secretary of Commerce. Their confirmations seemed assured as well.
Pulte got the second-most of attention – and generally friendly inquiries from both sides of the aisle. “Your private sector insight on these matters is rare, and it’s much needed here in Washington,” emphasized Bill Hagerty…(Thursday)
Click here to subscribe and read the rest of the article.
Thanks for reading. Follow us on X @CapitolAccount and on LinkedIn by clicking here. We’re always looking for stories, so if you have any suggestions on what we should cover (or comments about Capitol Account), shoot us a note. Rob can be reached at: rschmidt@capitolaccountdc.com and Ryan at rtracy@capitolaccountdc.com. If somebody forwarded this to you and you’d like to subscribe, click on the button below. Please email for information on our special rates for government employees, academics and groups: subscriptions@capitolaccountdc.com.
Social Media Wars: Before he was nominated as FHFA director, Pulte made a name for himself by giving money away on social media. But “Twitter Philanthropy,” which brought him several million followers and the attention of Trump, was only one aspect of the homebuilding scion’s voluminous online presence. He appears to have deleted much of the rest.
His now-invisible X posts, some of which were preserved by followers or in court records, show a different and far more contentious side of Pulte than he now presents to the public. He accused the current CEO of PulteGroup, the home construction company his grandfather founded, of corruption. Another feud featured a prominent Wall Street executive.
And a hairstylist in Houston accused Pulte of egging on digital trolls who were harassing her, including one who claimed to have pictures of her children. “They want me to live in fear,” she said in an online video several months ago. “These are vile, vile things that these people are saying, and he thinks it's just hilarious. And he continues to push this.”
A spokeswoman for Pulte said in a statement that he is “a successful businessman and philanthropist who has spent his career revitalizing businesses, investing in communities and helping families in need. His leadership at Pulte Homes helped create billions in value, and his philanthropic efforts have directly impacted thousands of Americans, providing critical financial support for housing, medical bills and everyday necessities. His focus remains on expanding homeownership opportunities, strengthening communities and using his platform to advocate for policies that benefit hardworking Americans.”
Pulte’s tangled web of disputes is largely outside the realm of housing policy and has received scant attention in Washington. Being hyperaggressive on social media, of course, is no disqualifier (and may be a plus) for jobs in the Trump administration. The president himself regularly spews vitriol and takes swings at opponents on his Truth Social account. However when it comes to Trump’s choices for leading financial regulators, Pulte stands out from what have mostly been mainstream, buttoned-up conservatives like Treasury Secretary Scott Bessent or SEC chairman pick Paul Atkins, who have little online footprint.
If confirmed, Pulte would bring that Trumpian swagger – and penchant for rhetorical flamethrowing – to a major post overseeing the safety and soundness of the U.S. housing markets. How that translates into policy, including fulfilling the administration's goal of springing Fannie Mae and Freddie Mac from government conservatorship, is anybody’s guess. But his social media trail suggests that it could be a wild ride.
What follows is an in-depth look at several of Pulte’s online exploits…(Tuesday)
Click here to subscribe and read the rest of the story.
