Proposed Rule2026-03753
Post-Election Training for New Board Members
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
February 25, 2026
Issuing agencies
National Credit Union Administration
Abstract
The NCUA Board (Board) solicits public comment on a proposal to eliminate the regulatory requirement that each director of a federal credit union (FCU) attain a working familiarity with finance and accounting within 6 months after election or appointment. The Board believes the regulation is unnecessarily prescriptive.
Full Text
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<title>Federal Register, Volume 91 Issue 37 (Wednesday, February 25, 2026)</title>
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[Federal Register Volume 91, Number 37 (Wednesday, February 25, 2026)]
[Proposed Rules]
[Pages 9177-9179]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-03753]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 701
RIN 3133-AF96
Post-Election Training for New Board Members
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
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SUMMARY: The NCUA Board (Board) solicits public comment on a proposal
to eliminate the regulatory requirement that each director of a federal
credit union (FCU) attain a working familiarity with finance and
accounting within 6 months after election or appointment. The Board
believes the regulation is unnecessarily prescriptive.
DATES: Comments must be received by April 27, 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-2026-0430. 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#58171f1b1539313418363b2d39763f372e"><span class="__cf_email__" data-cfemail="307f77737d51595c705e5345511e575f46">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Ariel Pereira, 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 a final rule published on December 28, 2010, the NCUA
established Sec. 701.4 to document and clarify the fiduciary duties
and responsibilities of FCU directors.\1\ This regulation was created
to address concerns about director accountability and to ensure
directors act in the best interests of the FCU's membership. Among
other requirements, the final rule set standards for financial literacy
for directors. Specifically, Sec. 701.4(b)(3) requires that each
director, at the time of election or appointment, or within a
reasonable time thereafter, not to exceed 6 months, have at least a
working familiarity with basic finance and accounting practices,
including the ability to read and understand the FCU's balance sheet
and income statement and to ask, as appropriate, substantive questions
of management and internal and external auditors.
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\1\ 75 FR 81378 (Dec. 28, 2010).
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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).\2\ 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.\3\ 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.\4\
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.\5\
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\2\ 12 U.S.C. 1751 et seq.
\3\ 12 U.S.C. 1766(a).
\4\ 12 U.S.C. 1789.
\5\ 12 U.S.C. 1766(a).
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II. Proposed Rule
While the Board continues to believe that directors must have a
working familiarity with basic finance and accounting practices, it
proposes to eliminate Sec. 701.3(b)(3). Upon reconsideration, the
Board believes that the regulation is overly prescriptive. The members
of an FCU are in the best position to elect qualified individuals to
the board. This policy determination is supported by the fact that the
Federal Credit Union Act, while vesting each FCU board with ``general
direction and control'' of the credit union at 12 U.S.C. 1761b, does
not direct the NCUA to establish specific qualifications for directors.
Under the CAMELS Rating System, the NCUA will continue to assess
``the capabilities of the board of directors and management, in their
respective roles, to identify, measure, monitor, and control
[[Page 9178]]
the risks of a credit union's activities and to ensure a credit union's
safe, sound, and efficient operation in compliance with applicable laws
and regulations.'' \6\
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\6\ NCUA, Letter to Credit Unions 22-CU-05, CAMELS Rating System
(March 2022), <a href="https://ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/camels-rating-system">https://ncua.gov/regulation-supervision/letters-credit-unions-other-guidance/camels-rating-system</a>.
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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 solicits public comment on a proposal to
eliminate the regulatory requirement that each FCU director attain a
working familiarity with finance and accounting within 6 months after
election or appointment. The Board believes the regulation is
unnecessarily prescriptive and that the FCU board itself is best suited
to manage the ongoing education of its directors. The NCUA will
continue to assess the competency of FCU boards using existing
supervision tools under a risk-based examination approach.
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.\7\ 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.\8\
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 would eliminate the prescriptive regulatory requirement
that each FCU director attain a working familiarity with finance and
accounting within 6 months after election or appointment and is
consistent with Executive Order 13563.
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\7\ 58 FR 51735 (Oct. 4, 1993).
\8\ 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.\9\ This proposed rule is expected to be a deregulatory
action for purposes of Executive Order 14192.
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\9\ 90 FR 9065 (Feb. 6, 2025).
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C. Regulatory Flexibility Act
The Regulatory Flexibility Act \10\ 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.\11\ For purposes of this
analysis, the NCUA considers small credit unions to be those having
under $100 million in assets.\12\ The Board fully considered the
potential economic impacts of the regulatory amendments on small credit
unions.
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\10\ 5 U.S.C. 601 et seq.
\11\ 5 U.S.C. 605(b).
\12\ 80 FR 57512 (Sept. 24, 2015).
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The proposed rule would eliminate the requirement that FCU
directors attain a working familiarity with finance and accounting
within 6 months after election or appointment. As an initial matter,
the NCUA notes that the proposed rule would relieve FCUs of current
compliance costs and is deregulatory in nature.
It is probable that many new board members already have the
required knowledge in finance and accounting at the time of election or
appointment to an FCU board. Indeed, it is likely that such familiarity
was a factor in their selection to the board. Therefore, to the extent
that FCUs currently incur any costs to comply with the education
requirements, such costs are unlikely to be significant because they
are limited to the subset of new directors that lack the required
familiarity. Accordingly, the economic impacts associated with
rescinding this provision is equally unlikely to be significant.
Accordingly, 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.\13\ 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 applies solely to FCUs and therefore would not have a substantial
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. The NCUA
welcomes comments on ways to eliminate, or at least minimize, any
potential impact in this area.
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\13\ 64 FR 43255 (Aug. 10, 1999).
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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.\14\ The regulatory
requirements that are the subject of this proposed rule are exclusively
concerned with the education of FCU directors. The potential positive
effect on family well-being, including financial well-being is, at
most, indirect.
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\14\ Public Law 105-277, 112 Stat. 2681 (1998).
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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 20th day
of February, 2026.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons stated in the preamble, the Board proposes to amend
12 CFR part 701, as follows:
PART 701--ORGANIZATION AND OPERATION OF FEDERAL CREDIT UNIONS
0
1. The authority citation for part 701 continues 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 701.31
is also authorized by 15 U.S.C. 1601 et seq.; 42 U.S.C. 1981 and
3601-3610. Section 701.35 is also authorized by 42 U.S.C. 4311-4312.
Sec. 701.4 [Amended]
0
2. Amend Sec. 701.4 by:
0
a. Removing paragraph (b)(3); and
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b. Redesignating paragraph (b)(4) as paragraph (b)(3).
[FR Doc. 2026-03753 Filed 2-24-26; 8:45 am]
BILLING CODE 7535-01-P
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</html>Indexed from Federal Register on February 25, 2026.
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