Proposed Rule2026-01697
Requirements for Insurance; Maximum Borrowing Authority
Primary source
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Published
January 28, 2026
Issuing agencies
National Credit Union Administration
Abstract
The NCUA Board (Board) seeks comment on a proposed rule to remove the maximum borrowing authority from the NCUA's regulations that establish the requirements for obtaining and maintaining federal share insurance with the National Credit Union Share Insurance Fund (Share Insurance Fund). This provision applies to all federally insured credit unions (FICUs). Removing this regulation would eliminate an unnecessary provision that duplicates the statutory maximum borrowing limit for federal credit unions (FCUs). For federally insured, state-chartered credit unions (FISCUs), removing this section would reduce the federal regulatory burden associated with the federal limit and related waiver provision.
Full Text
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<title>Federal Register, Volume 91 Issue 18 (Wednesday, January 28, 2026)</title>
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[Federal Register Volume 91, Number 18 (Wednesday, January 28, 2026)]
[Proposed Rules]
[Pages 3692-3695]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-01697]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 741
RIN 3133-AF94
Requirements for Insurance; Maximum Borrowing Authority
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
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SUMMARY: The NCUA Board (Board) seeks comment on a proposed rule to
remove the maximum borrowing authority from the NCUA's regulations that
establish the requirements for obtaining and maintaining federal share
insurance with the National Credit Union Share Insurance Fund (Share
Insurance Fund). This provision applies to all federally insured credit
unions (FICUs). Removing this regulation would eliminate an unnecessary
provision that duplicates the statutory maximum borrowing limit for
federal credit unions (FCUs). For federally insured, state-chartered
credit unions (FISCUs), removing this section would reduce the federal
regulatory burden associated with the federal limit and related waiver
provision.
DATES: Comments must be received by March 30, 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-2026-0134. 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#d19e96929cb0b8bd91bfb2a4b0ffb6bea7"><span class="__cf_email__" data-cfemail="88c7cfcbc5e9e1e4c8e6ebfde9a6efe7fe">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Keisha Brooks, Attorney-Advisor,
Office of General Counsel, at (703) 518-6540 or at 1775 Duke Street,
Alexandria, VA 22314.
SUPPLEMENTARY INFORMATION:
I. Introduction
Part 741 of the NCUA's regulations implements Title II of the
Federal Credit Union Act (FCU Act), which governs the Share Insurance
Fund.\1\ Part 741 applies to all FICUs and prescribes various
requirements for obtaining and maintaining federal share insurance and
the payment of insurance premiums and the capitalization deposit.\2\
Subpart A of part 741 contains substantive requirements that are not
codified elsewhere in the NCUA's regulations. Subpart B lists
additional regulations, set forth elsewhere in the NCUA's regulations
as applying to FCUs, that also apply to FISCUs.\3\
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\1\ 12 U.S.C. 1781 et seq.
\2\ 60 FR 58504 (Nov. 28, 1995).
\3\ See 64 FR 41040 (July 29, 1999); 65 FR 8593 (Feb. 18, 2000);
67 FR 71094 (Nov. 29, 2002); 77 FR 5162 (Feb. 2, 2012).
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A. Background
Among part 741's requirements, Sec. 741.2 of the NCUA's
regulations
[[Page 3693]]
establishes a maximum borrowing authority for FICUs, limiting aggregate
borrowing from any source to an amount not in excess of 50 percent of
its paid-in and unimpaired capital and surplus. Under section 107(9) of
the FCU Act, FCUs have the express power to borrow, in accordance with
such rules and regulations as may be prescribed by the Board, from any
source, limited to 50 percent of paid-in and unimpaired capital and
surplus.\4\ Section 741.2 implements this statutory borrowing authority
for FCUs.
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\4\ 12 U.S.C. 1757(9).
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In 1971, shortly after the passage of Title II of the FCU Act, the
Board issued regulations governing various aspects of the share
insurance program.\5\ In particular, the Board issued a regulation
requiring all FICUs to comply with the FCU Act's borrowing limit.\6\ In
2004, the NCUA amended Sec. 741.2 to add a waiver process for FISCUs
seeking to exceed the 50 percent borrowing limit.\7\ The provision
allowed a FISCU to apply to the appropriate regional director for
authority to borrow up to the amount permitted by applicable state law
or its state regulator. The 2004 amendment was intended to provide
these credit unions with greater flexibility, consistent with
principles of dual chartering.
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\5\ Public Law 91-468 (Oct. 19, 1970).
\6\ 36 FR 10844 (June 4, 1971).
\7\ Final Rule, 69 FR 8547 (Feb. 25, 2004). In the preamble to
the proposed rule, the Board noted that, at the time of the 1971
rule, some states had no limitations on borrowing by FISCUs.
Proposed Rule, 68 FR 56537 (Oct. 1, 2003).
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At that time, the Board determined that borrowing more than 50
percent of paid-in and unimpaired capital and surplus may cause an
undue risk to the Share Insurance Fund and a loss of confidence in the
credit union system. The waiver process made the NCUA aware of those
FISCUs seeking a waiver from the maximum borrowing limit and enabled
monitoring of such credit unions. To ensure safety and soundness, the
waiver process required the credit union to submit a detailed analysis
of the safety and soundness implications of the waiver, a proposed
aggregate dollar amount or percentage of paid-in and unimpaired capital
and surplus limitation, a letter from the state regulator approving the
request, and an explanation of the need for a higher limit.\8\
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\8\ 12 CFR 741.2(b).
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B. Legal Authority
The Board has the legal authority to issue this proposed rule
pursuant to its plenary rulemaking authority under the FCU Act and its
specific rulemaking authority under the law.\9\ Under the FCU Act, the
NCUA is the chartering and supervisory authority for FCUs and the
federal supervisory authority for FICUs.\10\ The FCU Act grants the
NCUA a broad mandate to issue regulations governing all FICUs. Section
120 of the FCU Act is a general grant of regulatory authority and
authorizes the Board to prescribe rules and regulations for the
administration of the FCU Act.\11\ Section 207 of the FCU Act is a
specific grant of authority over share insurance coverage,
conservatorships, and liquidations.\12\ Section 209 of the FCU Act is a
plenary grant of regulatory authority to the Board to issue rules and
regulations necessary or appropriate to carry out its role as share
insurer for all FICUs.\13\ Additionally, section 107(9) of the FCU Act
authorizes the Board to issue regulations governing borrowing by
FCUs.\14\ Accordingly, the FCU Act grants the Board broad rulemaking
authority to ensure that the credit union industry and the Share
Insurance Fund remain safe and sound.
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\9\ 12 U.S.C. 1766, 1789.
\10\ 12 U.S.C. 1752-1775.
\11\ 12 U.S.C. 1766(a).
\12\ 12 U.S.C. 1787(b)(1).
\13\ 12 U.S.C. 1789(a)(11).
\14\ 12 U.S.C. 1757(9).
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II. Proposed Rule
Section 741.2 places a limit on the amount FICUs may borrow from
any source, setting the ceiling at 50 percent of its paid-in and
unimpaired capital and surplus. For FCUs, the 50 percent borrowing
limit is explicitly established by statute and implemented in part 701,
making Sec. 741.2 duplicative and unnecessary for FCUs.\15\ Its
removal simplifies the Code of Federal Regulations and reduces the
volume of rules credit unions must track without altering the Board's
authority or the obligations of FCUs. The Board would continue to
ensure safety and soundness with respect to borrowing activities
through its standard examination and supervision processes.
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\15\ See 12 U.S.C. 1757(9); 12 CFR 701.38. Unlike Sec. 741.2,
Sec. 701.38 outlines the contractual requirements for FCU
borrowings.
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For FISCUs, the regulation's extension of this specific borrowing
limit was a discretionary policy choice, not a statutory mandate. The
regulation not only extends this limit to FISCUs but also creates a
complex waiver process. The Board has reconsidered its position that
applying the maximum borrowing limit to FISCUs is necessary for safety
and soundness, and instead finds the current requirements impose an
unnecessary burden without a corresponding statutory mandate or
significant safety and soundness benefit. The Board believes that
safety and soundness considerations related to borrowing by FISCUs can
be more effectively and efficiently monitored through the risk-based
examination and supervision process, in close coordination with state
regulators where applicable. Removing this section would reduce
administrative burdens associated with the federal limit and related
waiver process while maintaining robust supervisory oversight. This
approach is more flexible and better respects the dual-chartering
system by avoiding a rigid, one-size-fits-all federal rule.
The Board solicits comments on all aspects of this proposal.
Specifically, the Board seeks comment on whether these provisions are
redundant of existing statutory authority, particularly state laws or
regulations, and whether their elimination would simplify compliance
for FICUs without negatively impacting regulatory clarity or safety and
soundness.
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
Act, under its terms, applies to notices of proposed rulemaking and
does not expressly include other types of documents that the Board
publishes voluntarily for public comment, such as notices and interim-
final rules that request comment despite invoking ``good cause'' to
forgo such notice and public procedure. The Board, however, has elected
to address the Act's requirement in these types of documents in the
interests of administrative consistency and transparency.
In summary, the Board seeks comment on a proposed rule to remove
the maximum borrowing authority from the NCUA's regulations that
establish the requirements for obtaining and maintaining federal share
insurance with the Share Insurance Fund. This provision applies to all
FICUs. Removing this regulation would eliminate an unnecessary
provision that duplicates the statutory maximum borrowing limit for
FCUs. For FISCUs,
[[Page 3694]]
removing this section would reduce the federal regulatory burden
associated with the federal limit and related waiver provision.
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.\16\ 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.\17\ This proposed rule was drafted and reviewed in accordance
with Executive Order 12866 and Executive Order 13563. For FCUs,
removing Sec. 741.2 would eliminate a regulation that unnecessarily
duplicates a statutory requirement that is implemented in part 701. For
FISCUs, removing Sec. 741.2 would reduce the regulatory burden
associated with a complex waiver process. The proposed rule is
consistent with 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.
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\16\ 58 FR 51735 (Oct. 4, 1993).
\17\ 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.\18\ This proposed rule is expected to be a deregulatory
action for purposes of Executive Order 14192.
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\18\ 90 FR 9065 (Feb. 6, 2025).
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C. Regulatory Flexibility Act
The Regulatory Flexibility Act \19\ 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
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.\20\ For purposes of this
analysis, the NCUA considers small credit unions to be those having
under $100 million in assets.\21\ The Board fully considered the
potential economic impacts of the regulatory amendments on small credit
unions.
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\19\ 5 U.S.C. 601 et seq.
\20\ 5 U.S.C. 605(b).
\21\ 80 FR 57512 (Sept. 24, 2015).
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To the extent that the proposed rule would have any economic
impacts, they will be deregulatory in nature. The proposed rule would
reduce regulatory burdens on FICUs by eliminating an unnecessary
provision within the NCUA's regulations that impose requirements on
FICUs for obtaining and maintaining federal share insurance. For FCUs,
removing Sec. 741.2 would eliminate a regulation that unnecessarily
duplicates a statutory requirement that is implemented in part 701. For
FISCUs, removing Sec. 741.2 would reduce the regulatory burden
associated with a complex waiver process.
Accordingly, particularly based on the few waiver requests the NCUA
has received, the NCUA certifies the proposed rule would not have a
significant economic impact on a substantial number of small credit
unions.
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 in the proposed rule 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 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 FISCUs. 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 change would eliminate a regulation that duplicates a
statutory requirement only applicable to FCUs. The proposed change
would also reduce the regulatory burden associated with a regulatory
waiver process only applicable to FISCUs and is not intended to affect
the division of responsibilities between the NCUA and state regulatory
authorities with oversight of FISCUs. This proposed rule would apply to
FCUs and FISCUs. The rulemaking may, therefore, have some effect on the
states, the relationship between the national government and the
states, or on the distribution of power and responsibilities among the
various levels of government. However, to the extent the rule has any
such effects, they will relieve FISCUs of regulatory burden. The
proposed rule would remove a duplicative rule for FCUs and, deferring
to state law as appropriate, provide greater flexibility for FISCUs by
reducing the administrative burden associated with a federal limit and
a federal regulatory waiver process. The rulemaking would therefore not
have direct effect on the states, the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government.
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.\22\ The proposed rule
relates to the maximum borrowing limits for FICUs, and any effect on
family well-being is expected to be indirect. The potential positive
effect on family well-being, including financial well-being is, at
most, indirect.
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\22\ Public Law 105-277, 112 Stat. 2681 (1998).
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List of Subjects in 12 CFR Part 741
Bank deposit insurance, Credit, Credit unions, Reporting and
Recordkeeping requirements.
[[Page 3695]]
By the National Credit Union Administration Board, this 23rd day
of January, 2026.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons stated in the preamble, the NCUA Board proposes to
amend 12 CFR part 741, as follows:
PART 741--REQUIREMENTS FOR INSURANCE
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1. The authority citation for part 741 continues to read as follows:
Authority: 12 U.S.C. 1757, 1766(a), 1781-1790, and 1790d; 31
U.S.C. 3717.
Sec. 741.2 [Removed and reserved]
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2. Remove and reserve Sec. 741.2.
[FR Doc. 2026-01697 Filed 1-27-26; 8:45 am]
BILLING CODE 7535-01-P
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