Proposed Rule2025-22487
Corporate Credit Unions
Primary source
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Published
December 11, 2025
Issuing agencies
National Credit Union Administration
Abstract
The NCUA Board (Board) is proposing to amend its regulations for corporate credit unions by removing the requirement that a corporate credit union's asset and liability management committee (ALCO) must have at least one member who is also a member of the corporate credit union's board of directors. The proposed rule would also remove filing requirements related to a corporate credit union's annual report and any management letter or other report issued by its independent public accountant. The intended effect is to reduce unnecessary regulatory burden and provide corporate credit unions with greater flexibility.
Full Text
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<title>Federal Register, Volume 90 Issue 236 (Thursday, December 11, 2025)</title>
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[Federal Register Volume 90, Number 236 (Thursday, December 11, 2025)]
[Proposed Rules]
[Pages 57391-57393]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22487]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 704
RIN 3133-AF73
Corporate Credit Unions
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
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SUMMARY: The NCUA Board (Board) is proposing to amend its regulations
for corporate credit unions by removing the requirement that a
corporate credit union's asset and liability management committee
(ALCO) must have at least one member who is also a member of the
corporate credit union's board of directors. The proposed rule would
also remove filing requirements related to a corporate credit union's
annual report and any management letter or other report issued by its
independent public accountant. The intended effect is to reduce
unnecessary regulatory burden and provide corporate credit unions with
greater flexibility.
DATES: Comments must be received by February 9, 2026.
ADDRESSES: Comments may be submitted in one of the following ways.
(Please send comments by one method only):
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
The docket number for this proposed rule is NCUA-2025-1302. Follow the
``Submit a comment'' instructions. If you are reading this document on
<a href="http://federalregister.gov">federalregister.gov</a>, you may use the green ``SUBMIT A PUBLIC COMMENT''
button beneath this rulemaking's title to submit a comment to the
<a href="http://regulations.gov">regulations.gov</a> docket. A plain language summary of the proposed rule
is also available on the docket website.
<bullet> Mail: Address to Melane Conyers-Ausbrooks, Secretary of
the Board, National Credit Union Administration, 1775 Duke Street,
Alexandria, Virginia 22314-3428.
<bullet> Hand Delivery/Courier: Same as mailing address.
Mailed and hand-delivered comments must be received by the close of
the comment period.
Public inspection: Please follow the search instructions on <a href="https://www.regulations.gov">https://www.regulations.gov</a> to view the public comments. Do not include any
personally identifiable information (such as name, address, or other
contact information) or confidential business information that you do
not want publicly disclosed. All comments are public records; they are
publicly displayed exactly as received, and will not be deleted,
modified, or redacted. Comments may be submitted anonymously. If you
are unable to access public comments on the internet, you may contact
the NCUA for alternative access by calling (703) 518-6540 or emailing
<a href="/cdn-cgi/l/email-protection#0f40484c426e66634f616c7a6e21686079"><span class="__cf_email__" data-cfemail="c68981858ba7afaa86a8a5b3a7e8a1a9b0">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Rachel Ackmann, Senior Attorney,
Office of General Counsel, at (703) 518-6540 or at 1775 Duke Street,
Alexandria, VA 22314
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
In 2010, the Board comprehensively revised the regulations
governing corporate credit unions to provide longer-term structural
enhancements to the corporate system in response to the financial
crisis of 2007-2009.\1\ The provisions of the 2010 rule were intended
to stabilize the corporate system and improved corporate credit unions'
ability to function and provide services to natural person credit
unions without undue risk. Since 2010, and as part of the Board's
continuous reevaluation of its regulation of corporate credit unions,
the Board has amended part 704 on several occasions.\2\
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\1\ 75 FR 64786 (Oct. 20, 2010).
\2\ See e.g., 80 FR 25932 (May 6, 2015) and 80 FR 57283 (Sept.
23, 2015).
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In 2017, the Board amended corporate credit union capital standards
to change the calculation of capital after a consolidation and to set a
retained earnings ratio target.\3\ In October 2020, the Board issued a
final rule to amend several provisions relating to corporate credit
union investments in credit union service organizations (CUSOs) and
other provisions relating to corporate credit union governance.\4\
Finally, in 2021, the Board amended part 704 to clarify that corporate
credit unions may purchase subordinated debt instruments issued by
consumer credit unions.\5\
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\3\ 82 FR 55497 (Nov. 22, 2017).
\4\ 85 FR 17288 (Mar. 27, 2020).
\5\ 86 FR 10729 (Feb. 23, 2021).
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B. Legal Authority
The Board is issuing this proposed rule pursuant to its authority
under the Federal Credit Union Act (FCU Act).\6\ Under the FCU Act, the
NCUA is the chartering and supervisory authority for federal credit
unions (FCUs) and the federal supervisory authority for federally
insured credit unions (FICUs). The FCU Act grants the NCUA a broad
mandate to issue regulations governing both FCUs and FICUs. Section 120
of the FCU Act is a general grant of regulatory authority and
authorizes the Board to prescribe regulations for the administration of
the FCU Act.\7\ Section 209 of the FCU Act is a plenary grant of
regulatory authority to the NCUA to issue regulations necessary or
appropriate to carry out its role as share insurer for all FICUs.\8\
The FCU Act also includes an express grant of authority for the Board
to subject federally chartered central, or corporate, credit unions to
such rules, regulations, and orders as the Board deems appropriate.\9\
Part 704 of the NCUA's regulations implements the requirements of the
FCU Act regarding corporate credit unions.\10\
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\6\ 12 U.S.C. 1751 et seq.
\7\ 12 U.S.C. 1766(a).
\8\ 12 U.S.C. 1789.
\9\ 12 U.S.C. 1766(a).
\10\ 12 CFR part 704.
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II. Proposed Rule
A. ALCO Committee Representation
Before the financial crisis of 2007-2009, the Board comprehensively
revised part 704 (1997 final rule).\11\ The 1997 final rule required
that corporate credit unions operate according to a written asset and
liability management policy. Additionally, the 1997 final rule required
that each corporate credit union's ALCO have at least one member who is
also a member of the board of directors. The board member requirement
has not been amended since 1997.
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\11\ 62 FR 12938 (Mar. 19, 1997).
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The Board now proposes to rescind the requirement for each
corporate credit union's ALCO to have at least one member who is also a
member of the board of directors. After careful review, the Board
believes that this prescriptive approach is unnecessary. The Board's
primary policy rationale for this proposed elimination is that this
requirement is overly prescriptive and inflexible, and corporate credit
union boards should have discretion to determine their ALCO membership.
B. Filing Requirements for a Corporate Credit Union's Annual Report
The 1997 final rule also required that a corporate credit union's
supervisory committee get an annual opinion audit
[[Page 57392]]
of the corporate credit union's financial statements. The supervisory
committee was required to submit the audit report to the board of
directors. In addition, the supervisory committee had to submit a copy
of the audit report and copies of all communications provided to the
corporate credit union by the external auditor to the NCUA within 30
calendar days after receipt by the board of directors.\12\
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\12\ 62 FR 12929 (Mar. 19, 1997). See 12 CFR 704.15(a).
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In 2010, the Board amended corporate credit union audit
requirements by adding additional auditing, reporting, and supervisory
committee requirements.\13\ For consistent application of the
requirement, the Board required that a corporate credit union file a
copy of its annual report with the NCUA within 180 days following the
end of the calendar year.\14\ The Board also provided that the NCUA
would make a corporate credit union's annual report available for
public inspection and that, consistent with good corporate governance,
a corporate credit union was required to give the NCUA a copy of any
management letter or report issued by its independent public
accountant.\15\ Finally, the Board required corporate credit unions to
notify the NCUA when filing the annual report late.\16\
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\13\ 75 FR 73000 (Nov. 29, 2010).
\14\ 12 CFR 704.15(c)(1). The report must contain the audited
comparative financial statements, the independent public
accountant's report on those statements, a management report, and,
if applicable, the independent public accountant's attestation
report on management's assessment of internal control over financial
reporting.
\15\ 12 CFR 704.15(c)(2) and (c)(3).
\16\ 12 CFR 704.15(c)(5).
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The Board now proposes to remove several of its filing requirements
related to a corporate credit union's annual report. The proposed rule
would rescind the requirement to file a copy of an annual report and
any management letter or other report issued by its independent public
accountant with the NCUA within 180 days after the end of the calendar
year. The proposed rule would also rescind the requirement for the NCUA
to make the annual report available for public inspection. Along with
the proposed removal of these filing requirements, the Board would
rescind requirements related to untimely filings.
The Board is proposing to eliminate these filing requirements
because the section imposes an unnecessary and undue compliance burden
on corporate credit unions that is disproportionate to its limited
public benefit. The NCUA has access to corporate credit union records
and audit reports through its examination authority.\17\ The proposed
amendments only remove the requirements for the corporate credit union
to file the documents with the NCUA and does not limit the NCUA's
access to the information. NCUA examiners will continue to review these
materials through the examination process. The intended effect of the
proposed amendment is to reduce unnecessary regulatory burden without
affecting corporate credit union safety and soundness.
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\17\ 12 U.S.C. 1784.
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The Board notes that other aspects of the NCUA's filing
requirements will remain unchanged. Corporate credit unions will
continue to be required to notify the NCUA within 15 days of losing an
independent public accounting through dismissal or resignation. The
proposed rule would remove the requirement to report the engagement of
an independent public accountant. The Board is more concerned with
prompt notification for the dismissal or resignation of an accountant
than about notification of the initial engagement. The NCUA would have
access to the engagement letter if necessary and does not need prompt
notification. Additionally, a corporate credit union must submit a
preliminary annual report to the corporate credit union's membership at
its next calendar year's annual meeting.
The Board solicits comments on all aspects of the proposed rule.
III. Regulatory Procedures
A. Providing Accountability Through Transparency Act of 2023
The Providing Accountability Through Transparency Act of 2023 (5
U.S.C. 553(b)(4)) (Act) requires that a notice of proposed rulemaking
include the internet address of a summary of not more than 100 words in
length of a proposed rule, in plain language, that shall be posted on
the internet website under section 206(d) of the E-Government Act of
2002 (44 U.S.C. 3501 note) (commonly known as <a href="http://regulations.gov">regulations.gov</a>).
The Board is proposing to amend its regulations for corporate
credit unions by removing the requirement that a corporate credit
union's ALCO must have at least one member who is also a member of the
corporate credit union's board of directors. The proposed rule would
also remove filing requirements related to a corporate credit union's
annual report and any management letter or other report issued by its
independent public accountant. The intended effect is to reduce
unnecessary regulatory burden and provide corporate credit unions with
greater flexibility.
The proposal and the required summary can be found at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
B. Executive Orders 12866, 13563, and 14192
Pursuant to Executive Order 12866 (``Regulatory Planning and
Review''), as amended by Executive Order 14215, a determination must be
made whether a regulatory action is significant and therefore subject
to review by the Office of Management and Budget (OMB) in accordance
with the requirements of the Executive Order.\18\ Executive Order 13563
(``Improving Regulation and Regulatory Review'') supplements and
reaffirms the principles, structures, and definitions governing
contemporary regulatory review established in Executive Order
12866.\19\ This proposed rule was drafted and reviewed in accordance
with Executive Order 12866 and Executive Order 13563. OMB has
determined that this proposed rule is not a ``significant regulatory
action'' as defined in section 3(f)(1) of Executive Order 12866.
Further, this proposed rule will reduce the burden of filing certain
reports with the NCUA and increase flexibility for corporate credit
union boards to determine ALCO members and is consistent with Executive
Order 13563.
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\18\ 58 FR 51735 (Oct. 4, 1993).
\19\ 76 FR 3821 (Jan.21, 2011).
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Executive Order 14192 (``Unleashing Prosperity Through
Deregulation'') requires that any new incremental costs associated with
new regulations shall, to the extent permitted by law, be offset by the
elimination of existing costs associated with at least 10 prior
regulations.\20\ This proposed rule is expected to be a deregulatory
action for purposes of Executive Order 14192.
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\20\ 90 FR 9065 (Feb. 6, 2025),
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C. Regulatory Flexibility Act
The Regulatory Flexibility Act \21\ generally requires an agency to
conduct a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements, unless the agency certifies that
the rule will not have a significant economic impact on a substantial
number of small entities. If the agency makes such a certification, it
must publish the certification at the time of publication of either the
proposed rule or the final rule, along with a statement providing the
factual basis for such certification.\22\ For purposes of this
analysis, the NCUA
[[Page 57393]]
considers small credit unions to be those having under $100 million in
assets.\23\ The Board fully considered the potential economic impacts
of the regulatory amendments on small credit unions. There are no
corporate credit unions under $100 million in assets. Accordingly, the
NCUA certifies the proposed rule would not have a significant economic
impact on a substantial number of small credit unions.
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\21\ 5 U.S.C. 601 et seq.
\22\ 5 U.S.C. 605(b).
\23\ 80 FR 57512 (Sept. 24, 2015).
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D. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) generally provides that
an agency may not conduct or sponsor, and not withstanding any other
provision of law, a person is not required to respond to, a collection
of information, unless it displays a currently valid Office of
Management and Budget control number. The PRA applies to rulemakings in
which an agency creates a new or amends existing information collection
requirements. For purposes of the PRA, an information-collection
requirement may take the form of a reporting, recordkeeping, or a
third-party disclosure requirement. The NCUA has determined that the
changes addressed in this notice do not create a new information
collection or revise an existing information collection as defined by
the PRA.
E. Executive Order 13132 on Federalism
Executive Order 13132 encourages certain regulatory agencies to
consider the impact of their actions on state and local interests. The
NCUA, an agency as defined in 44 U.S.C. 3502(5), complies with the
executive order to adhere to fundamental federalism principles. This
proposed rule would apply to all FICUs, including state-chartered
credit unions. The NCUA expects that any effect on states or on the
distribution of power and responsibilities among the various levels of
government will be minor. The proposed changes would remove existing
federal filing requirements for state-chartered corporate credit unions
and do not negatively affect the division of responsibilities between
the NCUA and state regulatory authorities with oversight of federally
insured, state-chartered corporate credit unions. The NCUA welcomes
comments on ways to eliminate, or at least minimize, any potential
impact in this area.
F. Assessment of Federal Regulations and Policies on Families
The NCUA has determined that this proposed rule would not affect
family well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999.\24\ The proposed
rescission is exclusively concerned with corporate credit union
governance and filing requirements. The proposed rule is intended to
reduce regulatory burden while maintaining a strong corporate system to
support consumer credit unions in their provision of financial services
to members. The potential positive effect on family well-being,
including financial well-being is, at most, indirect.
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\24\ Public Law 105-277, 112 Stat. 2681 (1998).
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List of in Subjects 12 CFR Part 704
Credit unions, Reporting and recordkeeping requirements, Surety
bonds.
By the National Credit Union Administration Board, this 8th day
of December 2025.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons stated in the preamble, the NCUA Board proposes to
amend 12 CFR part 704 as follows:
PART 704--CORPORATE CREDIT UNIONS
0
1. The authority citation continues to read as follows:
Authority: 12 U.S.C. 1766(a), 1781, 1789.
0
2. Revise section 704.8(b) to read as follows:
Sec. 704.8 Asset and liability management.
* * * * *
(b) Asset and liability management committee (ALCO). The ALCO must
review asset and liability management reports on at least a monthly
basis. These reports must address compliance with Federal Credit Union
Act, NCUA Rules and Regulations (12 CFR chapter VII), and all related
risk management policies.
* * * * *
0
3. Revise Sec. 704.15(c) to read as follows:
Sec. 704.15 Audit and reporting requirements.
* * * * *
(c) Filing and notice requirements--(1) Notice of dismissal or
resignation of accountants. Each corporate credit union that loses an
independent public accountant through dismissal or resignation, must
notify the NCUA within 15 days after the dismissal, or resignation. The
corporate credit union must include with the notice a reasonably
detailed statement of the reasons for any dismissal or resignation. The
corporate credit union must also provide a copy of the notice to the
independent public accountant at the same time the notice is filed with
the NCUA.
(2) Report to Members. A corporate credit union must submit a
preliminary Annual Report to the membership at the next calendar year's
annual meeting.
* * * * *
[FR Doc. 2025-22487 Filed 12-10-25; 8:45 am]
BILLING CODE 7535-01-P
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