Proposed Rule2026-03756
Refund of Interest
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) is issuing for public comment a proposal to rescind its regulation that addresses the refund of interest to members. This regulation is redundant, as it restates the authority already granted to a federal credit union's (FCU's) board of directors by the Federal Credit Union Act (FCU Act) section 113(9).
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 37 (Wednesday, February 25, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 37 (Wednesday, February 25, 2026)]
[Proposed Rules]
[Pages 9179-9181]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-03756]
-----------------------------------------------------------------------
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 701
RIN 3133-AF99
Refund of Interest
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The NCUA Board (Board) is issuing for public comment a
proposal to rescind its regulation that addresses the refund of
interest to members. This regulation is redundant, as it restates the
authority already granted to a federal credit union's (FCU's) board of
directors by the Federal Credit Union Act (FCU Act) section 113(9).
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-2026-0433. 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#571810141a363e3b173934223679303821"><span class="__cf_email__" data-cfemail="155a525658747c79557b7660743b727a63">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Ian Marenna, Associate General Counsel
Office of General Counsel, at (703) 518-6540, or at 1775 Duke Street,
Alexandria, VA 22314.
SUPPLEMENTARY INFORMATION:
I. Background and Legal Authority
Section 113(9) of the FCU Act authorizes an FCU's board of
directors to issue interest refunds to members of record at the close
of business on the last day of any dividend period from income earned
and received in proportion to the interest paid by them during that
dividend period.\1\ Section 701.24 codifies section 113(9) of the FCU
Act in the NCUA's regulations and permits an FCU's board of directors
to authorize an interest refund to members from income earned during a
dividend period.\2\ The regulation allows the refund percentage to vary
by the type of extension of credit and interest rate charged \3\ and
permits an FCU board to exclude certain categories of loans, such as
delinquent loans, from the refund.\4\ Section 701.24 only permits a
refund of interest to be made for a dividend period if dividends on
share accounts have been declared and paid for that period.\5\ Section
701.24 was last amended in 1988.\6\
---------------------------------------------------------------------------
\1\ 12 U.S.C. 1761b(9).
\2\ 12 CFR 701.24.
\3\ Id. (b).
\4\ Id. (c).
\5\ Id. (a).
\6\ 53 FR 19747 (May 31, 1988).
---------------------------------------------------------------------------
II. Proposed Rule
The Board is proposing to eliminate Sec. 701.24 because it is
redundant: it restates the authority already granted directly to an
FCU's board of directors by section 113(9) of the FCU Act. Section
113(9) is a clear and self-executing grant of power that authorizes a
board to provide for interest refunds from income earned. The Board
believes that the removal of Sec. 701.24 simplifies the regulatory
code by eliminating unnecessary text and reduces regulatory burden by
limiting the number of sources that FCUs must check to ensure
compliance with laws and regulations. The Board interprets section
113(9) of the FCU Act to allow an FCU's board of directors to vary the
interest refund according to the type of extension of credit and the
interest rate charged, and to make certain exclusions from a loan
interest refund. Therefore, Sec. 701.24 is unnecessary.
The Board solicits comments on all aspects of this proposal. The
Board is especially interested in comments addressing whether the
removal of Sec. 701.24 would provide regulatory relief and whether any
of the current regulation should be preserved.
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
[[Page 9180]]
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 proposal would eliminate Sec. 701.24 of the NCUA's
regulations, which governs the refund of interest to members. This
regulation is redundant, as it restates the authority already granted
directly to an FCU's board of directors by section 113(9) of the FCU
Act.
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 to remove an unnecessary provision is consistent with
Executive Order 13563.
---------------------------------------------------------------------------
\7\ 58 FR 51735 (Oct. 4, 1993).
\8\ 76 FR 3821 (Jan.21, 2011).
---------------------------------------------------------------------------
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 under Executive Order 14192.
---------------------------------------------------------------------------
\9\ 90 FR 9065 (Feb. 6, 2025).
---------------------------------------------------------------------------
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. The proposed rule would eliminate Sec. 701.24 because it
restates the authority already granted to an FCU's board of directors
by section 113(9) of the FCU Act. Its removal simplifies the regulatory
code by eliminating unnecessary text. Therefore, the Board certifies
that the proposed rule would not have a significant economic impact on
a substantial number of small entities.
---------------------------------------------------------------------------
\10\ 5 U.S.C. 601 et seq.
\11\ 5 U.S.C. 605(b).
\12\ 80 FR 57512 (Sept. 24, 2015).
---------------------------------------------------------------------------
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 described 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 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), voluntarily complies with the
executive order to adhere to fundamental federalism principles. This
proposed rule would only impact FCUs. This proposed rule would
eliminate Sec. 701.24, as it is redundant and only restates the
authority already granted directly to an FCU's board of directors by
section 113(9) of the FCU Act. Its removal simplifies the regulatory
code by eliminating unnecessary text and thus would not have a 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.\13\ The proposed rule
would eliminate Sec. 701.24 because it is redundant and only restates
the authority already granted directly to an FCU's board of directors
by section 113(9) of the FCU Act. Its removal simplifies the regulatory
code by eliminating unnecessary text. While the proposed rescission is
intended to reduce regulatory burden generally to allow FCUs to focus
on their provision of financial services to members, any potential
positive effect on family well-being, including financial well-being
is, at most, indirect.
---------------------------------------------------------------------------
\13\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------
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 NCUA 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.
0
2. Remove and reserve Sec. 701.24.
[[Page 9181]]
Sec. 701.24 [Removed and reserved]
[FR Doc. 2026-03756 Filed 2-24-26; 8:45 am]
BILLING CODE 7535-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on February 25, 2026.
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.