Why Executive Orders Don’t Apply To Your Credit Union

Since President Biden issued an executive order in September mandating that Executive Branch employees and their contractors get vaccinated against COVID-19 the industry has parsed the text with an intensity worthy of a Talmudic scholar, hoping to divine whether or not credit union employees are federal contractors for purposes of this mandate. After all, as drafted, an argument can be made that share insurance is a government contract to which credit unions are subject.

But the truth is much more straightforward: because credit unions are not subject to this or any other executive order issued by this or any other president. The NCUA, as an independent agency, is not an executive agency subject to the president’s executive orders. Instead, NCUA was created by congress to exercise independently of the president and make its own policy judgments. 

This is not a radical pronouncement but simply a common sense application of prevailing law. Since Humphrey’s Ex’r v. U.S., 55 S.Ct. 869, 874, 295 U.S. 602, 629 (U.S. 1935) the Supreme Court has recognized the right of congress to create independent agencies specifically designed to be free of direct executive branch oversight. Furthermore, the court has taken a very narrow view of the president’s power to issue executive orders and apply them beyond the executive branch. As the court explained in Youngstown Sheet & Tube Co. v. Sawyer, 72 S.Ct. 863, 867, 343 U.S. 579, 587–88 (U.S. 1952) “The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute.” Congress.

Against this backdrop, there is a long line of examples of independent agencies pushing back against executive branch encroachments on their power. For example, the general counsel of the Securities and Exchange Commission once wrote a 24 page “Declaration of Independence” from a Carter administration proposal that regulations be submitted in plain English for public review, on the grounds that the order could set a precedent to undermine the agency’s independence

In short, a credit union can choose to follow an executive order’s mandates if it chooses to do so, but is not required to do so. In fact, an argument to the contrary has as much validity as suggesting that the credit union down the street can mandate what policies your credit union follows. 

One caveat: The exemption just applies if the only basis for complying is your connection to the NCUA. If your CU rents space from a federal agency for example, then you are a federal contractor.