ALEXANDRIA, VA (October 1, 2025) – The National Credit Union Administration (NCUA) Chairman Kyle S. Hauptman issued the following statement about NCUA’s No Regulation-by-Enforcement Policy:
Today’s policy statement fulfills a goal listed back in January upon being designated as Chairman: “Codifying our procedures to protect Americans from regulation-by-enforcement. For example, no enforcement action should ever set―or even clarify― policy. In America and other free societies, the sequence is: set speed limits, then give speeding tickets (no one has any obligation to be aware of someone else’s ticket).”
To be clear, this agency has a good track record regarding regulation-by-enforcement, so this statement shouldn’t be viewed as being the result of any recent NCUA actions. After all, it’s counterproductive for a deposit insurer to engage in regulation-by-enforcement against the same institutions we insure. That said, it’s important to put in writing a policy of fairness, whereby government employees give regulated credit unions the same due-process that they, under civil servant protections, rightly expect in their own careers. Today’s statement is born partly of my frustrating interactions with regulators, both in my time on Capitol Hill and in the private sector. I know that millions of others share the frustration of being told ‘if you want to figure out the rules, look at our prior settlements.’ Americans expect better from their government, including financial regulators.
No Regulation-by-Enforcement Policy Statement
Regulation-by-enforcement is unethical and not permitted at NCUA.
- Enforcement actions shall only occur in the case of clear and significant violations of law or regulation. Therefore, no person or entity regulated by NCUA has any obligation to be aware of any prior NCUA enforcement actions because no new policy is ever set via an enforcement action.
- 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 necessary tool, but is not, by itself, an accomplishment or a metric of success. Our goal is for credit unions to operate safely and soundly and in compliance with applicable laws and regulations. We will seek to remedy any such problems whenever we can without needing to use enforcement action. The goal is to resolve any problems, not to issue press releases, rack up enforcement numbers or improve the post-NCUA career options of agency staff. We don’t set “speed traps” to increase enforcement totals.
- A guiding principle here is avoiding double-standards. In their own careers, civil servants are protected against arbitrarily poor performance reviews, allegations of misconduct, wrongful termination and other things that could harm their career path. In turn, government employees must extend the same due process protections to those they regulate.
If NCUA finds a harmful practice that threatens our mission or is otherwise injurious or abusive, and it is not currently addressed by law or regulation, then our next step is to consider rulemaking or other remedy. As is the norm in America, the sequence of events at NCUA is: 1) publish rules, 2) then (and only then) enforce them.