Proposed Rule2026-00591
Nondiscrimination Requirements
Primary source
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Published
January 14, 2026
Issuing agencies
National Credit Union Administration
Abstract
The NCUA Board (Board) is publishing this proposed rule to remove a redundant and outdated regulation regarding nondiscrimination in lending. While the regulation was intended to summarize the Fair Housing Act (FHA) prohibitions on discrimination related to real estate related loans, appraisals, and advertising, the Board's last substantive amendment to the regulation was finalized in 2001. Thus, the regulation may not reflect all case law or regulatory developments under the FHA, a statute that primarily falls under the jurisdiction of the Department of Housing and Urban Development (HUD) and continues to apply to federal credit unions (FCUs) regardless of the NCUA's regulations. Thus, the Board believes the current regulation may cause confusion and unnecessary burden because it has not kept up with changes in FHA interpretation and implementation. For these reasons, the Board is proposing to remove this regulation in its entirety.
Full Text
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<title>Federal Register, Volume 91 Issue 9 (Wednesday, January 14, 2026)</title>
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[Federal Register Volume 91, Number 9 (Wednesday, January 14, 2026)]
[Proposed Rules]
[Pages 1467-1469]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-00591]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 701
RIN 3133-AF85
Nondiscrimination Requirements
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
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SUMMARY: The NCUA Board (Board) is publishing this proposed rule to
remove a redundant and outdated regulation regarding nondiscrimination
in lending. While the regulation was intended to summarize the Fair
Housing Act (FHA) prohibitions on discrimination related to real estate
related loans, appraisals, and advertising, the Board's last
substantive amendment to the regulation was finalized in 2001. Thus,
the regulation may not reflect all case law or regulatory developments
under the FHA, a statute that primarily falls under the jurisdiction of
the Department of Housing and Urban Development (HUD) and continues to
apply to federal credit unions (FCUs) regardless of the NCUA's
regulations. Thus, the Board believes the current regulation may cause
confusion and unnecessary burden because it has not kept up with
changes in FHA interpretation and implementation. For these reasons,
the Board is proposing to remove this regulation in its entirety.
DATES: Comments must be received on or before March 16, 2026.
ADDRESSES: You may submit written comments by any of the following
methods identified by RIN (Please send comments by one method only):
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments for Docket Number NCUA-
2026-0034.
<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 mail address.
Mailed and hand-delivered comments must be received by the close of
the comment period.
Public Inspection: All public comments are available on the Federal
eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a> as submitted, except
when impossible for technical reasons. Public comments will not be
edited to remove any identifying or contact information. 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#85cac2c6c8e4ece9c5ebe6f0e4abe2eaf3"><span class="__cf_email__" data-cfemail="7b343c38361a12173b15180e1a551c140d">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Gira Bose, Senior Staff Attorney,
Office of General Counsel, at (703) 518-6540 or at 1775 Duke Street,
Alexandria, VA 22314.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
Section 701.31 was first promulgated in 1972, and its purpose was
to summarize in one place the lending discrimination requirements
applicable to FCUs. The regulation includes nondiscrimination
requirements for loans and appraisals; advertising, notices, and logos
related to nondiscrimination; and guidelines for compliance with the
FHA.\1\ While Sec. 701.31 has been updated periodically in an effort
to keep up with changes to the FHA, it has not kept pace with
regulatory and case law changes regarding lending discrimination or
fair housing. Changes made to the regulation in the 1980s reiterated
the agency's original intent for Sec. 701.31 to ``summarize in one
place the prohibitions on discrimination in real estate lending
activities.'' \2\ The preamble to the 1989 final rule stated, the
``NCUA is not required by either the Fair Housing Act or the Equal
Credit Opportunity Act to promulgate regulations. However, the Board
believes it helpful to Federal credit unions to have the
nondiscrimination regulation in [one] place.'' \3\ In the intervening
years, however, the agency has not kept pace with this intent.
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\1\ Title VIII of the Civil Rights Act of 1968; 42 U.S.C. 3601-
3619.
\2\ 54 FR 46222 (Nov. 2, 1989).
\3\ Id.
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B. Legal Authority
The Federal Credit Union Act (FCUA or the Act) authorizes the Board
to adopt such regulations as it deems appropriate to administer the
Act.\4\ The FCUA does not require the agency to promulgate regulations
to assist credit unions in their compliance with the FHA or ECOA.
Neither the FHA nor ECOA require any such NCUA rulemaking. Thus, the
Board has determined that Sec. 701.31 may exist beyond the scope of
statutory requirements and should be rescinded.
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\4\ 12 U.S.C. 1766.
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II. Proposed Rule
It is not current agency practice to (1) issue regulations that
attempt to synthesize and interpret statutes primarily administered and
enforced by other agencies, or (2) embed guidance within the text of a
regulation which, considering the agency's position that guidance is
nonbinding, may cause unnecessary confusion.
Section 701.31 is duplicative of other, more comprehensive, federal
laws--principally the FHA and the Equal Credit Opportunity Act (ECOA)--
and their implementing regulations, such as the Consumer Financial
Protection Bureau's (CFPB) Regulation B. FCUs are obligated to comply
with these laws. Maintaining a separate NCUA regulation designed to
align with these sources creates unnecessary redundancy and a risk of
inconsistency if the NCUA's regulation is not perfectly aligned. This
creates unnecessary burden as FCUs attempt to determine what is current
law.
As already noted, it is not the agency's current practice to embed
guidelines into the text of regulations. To add to the confusion, some
of the content in Sec. 701.31 is presented as guidelines but may be
required under nondiscrimination laws. These guidelines have not been
updated since they were initially adopted and may not be as helpful
today or focus the reader on the most current lending discrimination
issues. For these reasons, the Board believes Sec. 701.31 should be
removed in its entirety. This proposed action would eliminate a
redundant regulation without weakening anti-discrimination protections.
As an alternative to the proposed rule, which fully rescinds Sec.
701.31, the agency considered retaining Sec. Sec. 701.31(c)
Nondiscrimination in appraisals and 701.31(d) Nondiscrimination in
advertising. Subsection 701.31(c) precludes an FCU from relying on an
appraisal that it knows or should know is based upon prohibited
characteristics or criteria that generally have a discriminatory
effect. The Board considered retaining Sec. 701.31(c) but determined
that it would be unnecessarily duplicative of the FHA prohibitions on
discrimination in appraisals and ECOA, which prohibits discrimination
in every aspect of a credit transaction. The regulation has also become
somewhat disjointed since the transfer of ECOA rulemaking authority to
the CFPB. Under ECOA's implementing regulation, Regulation B, creditors
must provide applicants with free copies of all appraisals and other
written valuations developed for credit applications secured by a first
lien on a dwelling. This requirement regarding appraisals on first
liens was previously expressed in the NCUA's regulations along with the
reference to appraisals on
[[Page 1468]]
subordinate liens. The Board considered keeping the remaining
requirement in Sec. 701.3(c) for FCUs to make available an appraisal
used in connection with a subordinate lien on a dwelling. While the
Board believes it is still good practice for FCUs to offer this
service, the Board does not believe it is necessary to maintain the
regulation solely for this purpose. The Board invites commenters to
provide feedback on its determination.
Subsection 701.31(d) governs the notice that FCUs must provide if
they engage in real estate lending. With respect to written and visual
advertisements, the regulation includes a template of the notice to be
placed in the lobby of the FCU and in the public area of each office
where such loans are made. This notice is intended to (1) notify the
public that the FCU is an equal housing lender under the FHA and does
not discriminate in any credit transaction in compliance with ECOA, and
(2) provide the NCUA's contact information in the event someone
believes they have been discriminated against and wishes to file a
complaint. This notice is also often referred to as the Fair Housing
poster and is required by HUD regulation.\5\ The NCUA's notice
requirement or poster also references the broader ECOA prohibition on
discriminating in any credit transaction.
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\5\ 24 CFR 110.25.
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The Board is proposing the removal of Sec. 701.31(d) because the
requirement to display a fair housing poster is rooted in HUD's
regulation interpreting the FHA. While HUD's regulation includes an
express waiver permitting lenders to substitute a poster prescribed by
a federal financial regulatory agency, a category that includes the
NCUA, the Board believes that compliance with the HUD regulation is
sufficient to meet the FHA requirement and does not need to be
duplicated in the NCUA's regulations. Neither ECOA nor Regulation B
require lenders to display a poster or notice akin to the HUD
regulation. If the agency were to maintain this provision, it would
likely need updating because the NCUA now offers credit union members
the opportunity to submit complaints online, an option that is not
included in the current Sec. 701.31(d) notice.
The Board invites commenters to provide feedback on whether
retaining the current regulation's reference to the fair housing and
ECOA poster is a preferable approach and, if so, why.
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)) 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>).
In summary, the NCUA is publishing this proposal to remove Sec.
701.31 regarding nondiscrimination in lending. While the rule follows
the FHA's prohibition on discrimination related to real estate loans,
appraisals, and advertising, the Board last substantively amended the
regulation in 2001. Thus, it may not reflect all case law or regulatory
developments under the FHA, a statute that primarily falls under the
jurisdiction of HUD. Furthermore, the Board believes that the current
regulation may cause confusion because it has not kept up with FHA
interpretation and implementation.
The proposed rule and the required summary are available 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. OMB has determined that
this proposed rule is not a ``significant regulatory action'' as
defined in section 3(f)(1) of Executive Order 12866.
Executive Order 13563 (``Improving Regulations and Regulatory
Review'') directs executive agencies to analyze regulations that are
``outmoded, ineffective, insufficient, or excessively burdensome, and
to modify, streamline, expand, or repeal them in accordance with what
has been learned.'' Executive Order 13563 also directs that, where
relevant, feasible, and consistent with regulatory objectives and to
the extent permitted by law, agencies are to identify and consider
regulatory approaches that reduce burdens and maintain flexibility and
freedom of choice for the public. This proposed rule will reduce the
unnecessary burden of FCUs having to determine which elements of the
regulation are consistent with HUD's current interpretation of the FHA.
This proposed rule is consistent with Executive Order 13563.
Executive Order 14192, entitled ``Unleashing Prosperity Through
Deregulation,'' was issued on January 31, 2025. Section 3(c) of
Executive Order 14192 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. This proposed rule is expected to be a
deregulatory action for purposes of Executive Order 14192.
C. The Regulatory Flexibility Act
The Regulatory Flexibility Act 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.\6\ If the agency makes such a certification,
it shall 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.\7\ For purposes of this
analysis, the NCUA considers small credit unions to be those having
under $100 million in assets.\8\ The Board fully considered the
potential economic impacts of the regulatory amendments on small credit
unions.
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\6\ 5 U.S.C. 601 et seq.
\7\ 5 U.S.C. 605(b).
\8\ 80 FR 57512 (Sept. 24, 2015).
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The proposed rule would repeal Sec. 701.31, which may be outdated,
and, thus, would simplify FCU compliance with the FHA. An FCUs'
obligations under the FHA and HUD's regulations would stay the same.
Accordingly, the NCUA certifies the proposed rule would not have a
significant economic impact on a substantial number of small credit
unions.
D. The 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
[[Page 1469]]
reporting, recordkeeping, or a third-party disclosure requirement. The
NCUA has determined that the changes in the proposed rule do not create
a new information collection or revise an existing information
collection as defined by the PRA.
E. Analysis on Executive Order 13132 on Federalism
Executive Order 13132 encourages certain 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 is limited in application to FCUs. It is intended to reduce the
burden on FCUs by removing a potential source of confusion. Thus, it is
not intended to affect the division of responsibilities between the
NCUA and state regulatory authorities with oversight of federally
insured, state-chartered credit unions.
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. The proposed rule relates
to FCUs' lending programs, and any effect on family well-being is
expected to be indirect.
List of Subjects in 12 CFR Part 701
Advertising, Aged, Civil rights, Credit, Credit unions, Fair
housing, Individuals with disabilities, Insurance, Marital status
discrimination, Mortgages, Religious discrimination, Reporting and
recordkeeping requirements, Sex discrimination, Signs and symbols,
Surety bonds.
By the National Credit Union Administration Board, this 9th day
of January, 2026.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons stated above, the NCUA Board proposes to remove 12
CFR 701.31 as follows:
PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS
0
1. Revise the authority citation for part 701 to read as follows:
Authority: 12 U.S.C. 1752(5), 1755, 1756, 1757, 1758, 1759,
1761a, 1761b, 1766, 1767, 1782, 1784, 1785, 1786, 1787, 1788, 1789.
Section 701.6 is also authorized by 15 U.S.C. 3717. Section 701.35
is also authorized by 42 U.S.C. 4311-4312.
0
2. Remove and reserve Sec. 701.31.
Sec. 701.31 [Removed and reserved]
[FR Doc. 2026-00591 Filed 1-13-26; 8:45 am]
BILLING CODE 7535-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.