Proposed Rule2026-04154
Regulatory Publication and Voluntary Review as Contemplated by the Economic Growth and Regulatory Paperwork Reduction Act of 1996
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
March 3, 2026
Issuing agencies
National Credit Union Administration
Abstract
As contemplated by the Economic Growth and Regulatory Paperwork Reduction Act of 1996, the NCUA is voluntarily reviewing agency regulations to identify rules that are outdated, unnecessary, or unduly burdensome. The NCUA divided its regulations into 10 categories and is publishing several Federal Register documents at regular intervals, each requesting comment on multiple categories of regulations. This third and final document requests comment on regulations in the categories of "Corporate Credit Unions," "Directors, Officers and Employees," "Anti-Money Laundering and Bank Secrecy Act," "Rules of Procedure," and "Safety and Soundness."
Full Text
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[Federal Register Volume 91, Number 41 (Tuesday, March 3, 2026)]
[Proposed Rules]
[Pages 10343-10349]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04154]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 91, No. 41 / Tuesday, March 3, 2026 /
Proposed Rules
[[Page 10343]]
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Chapter VII
[NCUA-2024-0014]
Regulatory Publication and Voluntary Review as Contemplated by
the Economic Growth and Regulatory Paperwork Reduction Act of 1996
AGENCY: National Credit Union Administration (NCUA).
ACTION: Notification of regulatory review; request for comments.
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SUMMARY: As contemplated by the Economic Growth and Regulatory
Paperwork Reduction Act of 1996, the NCUA is voluntarily reviewing
agency regulations to identify rules that are outdated, unnecessary, or
unduly burdensome. The NCUA divided its regulations into 10 categories
and is publishing several Federal Register documents at regular
intervals, each requesting comment on multiple categories of
regulations. This third and final document requests comment on
regulations in the categories of ``Corporate Credit Unions,''
``Directors, Officers and Employees,'' ``Anti-Money Laundering and Bank
Secrecy Act,'' ``Rules of Procedure,'' and ``Safety and Soundness.''
DATES: Comments must be received by June 1, 2026.
ADDRESSES: You may submit written comments by any of the following
methods (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 document is NCUA-2024-0014. Follow the
instructions for submitting comments. A plain language summary of the
document 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.
Public inspection: You may view all public comments on the Federal
eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a>, as submitted, except
for those we cannot post for technical reasons. The NCUA will not edit
or remove any identifying or contact information from the public
comments submitted. 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#2a656d69674b43466a44495f4b044d455c"><span class="__cf_email__" data-cfemail="d09f97939db1b9bc90beb3a5b1feb7bfa6">[email protected]</span></a>.
FOR FURTHER INFORMATION CONTACT: Pamela Yu, Special Counsel to the
General Counsel, Office of General Counsel, at the above address or
telephone (703) 518-6540.
SUPPLEMENTARY INFORMATION:
I. Introduction
Congress enacted section 2222 of the EGRPRA \1\ to reduce
regulatory burden imposed upon insured depository institutions
consistent with safety and soundness, to promote consistency between
the Federal banking agencies' regulations, and to support consumer
protection. The statute requires that not less frequently than once
every 10 years, the Federal Financial Institutions Examination Council
(FFIEC),\2\ along with the Federal banking agencies,\3\ conduct a
review of their regulations to identify outdated or otherwise
unnecessary regulatory requirements imposed on insured depository
institutions. In conducting this review, the FFIEC or the appropriate
Federal banking agencies (Office of the Comptroller of the Currency
[OCC], Board of Governors of the Federal Reserve System [FRB], and
Federal Deposit Insurance Corporation [FDIC]; herein Agencies \4\)
shall (a) categorize their regulations by type and (b) at regular
intervals, provide notice and solicit public comment on categories of
regulations, requesting commenters to identify areas of regulations
that are outdated, unnecessary, or unduly burdensome.\5\
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\1\ 12 U.S.C. 3311.
\2\ The FFIEC is an interagency body empowered to prescribe
uniform principles, standards, and report forms for the Federal
examination of financial institutions and to make recommendations to
promote uniformity in the supervision of financial institutions. The
FFIEC does not issue regulations.
\3\ The FFIEC is composed of the OCC, FRB, FDIC, NCUA, Consumer
Financial Protection Bureau (CFPB), and State Liaison Committee. Of
these, only the OCC, FRB, and FDIC are statutorily required to
undertake the EGRPRA review. The NCUA Board elected to participate
in the first and second EGRPRA reviews and again has elected to
participate in this review process. Consistent with its approach
during the first and second EGRPRA reviews, the NCUA is issuing
documents and requests for comment on its rules separately. The CFPB
is required to review its significant rules and publish a report of
its review no later than 5 years after they take effect. See 12
U.S.C. 5512(d). This process is separate from the EGRPRA process.
\4\ The Office of Thrift Supervision (OTS) was still in
existence at the time EGRPRA was enacted and was included in the
listing of Agencies. Since that time, the OTS has been eliminated
and its responsibilities have passed to the Agencies and the CFPB.
\5\ Federally insured credit unions are also subject to
regulations that are not reviewed under this decennial review
process because they were not promulgated by the NCUA. Examples
include rules for which rulemaking authority was transferred to the
CFPB and anti-money laundering and Bank Secrecy Act regulations
issued by the Department of the Treasury's Financial Crimes
Enforcement Network, among others. If, during this decennial review
process, the NCUA receives a comment about a regulation that is not
subject to NCUA review, it will forward that comment to the
appropriate agency.
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The NCUA is not statutorily required to undertake the EGRPRA review
because the NCUA is not an ``appropriate Federal banking agency'' as
specified in EGRPRA. In keeping with the spirit of the law, however,
the NCUA Board (Board) has once again elected to voluntarily
participate in the decennial review process. Accordingly, the NCUA has
participated along with the Agencies in the planning process but has
developed its own regulatory categories that are comparable with those
developed by the Agencies. Because of the unique circumstances of
federally insured credit unions and their members, the Board is issuing
a separate document from the Agencies. The NCUA's document is
consistent and comparable with the Agencies' document, except on issues
that are unique to credit unions.
EGRPRA also requires the FFIEC or the Agencies to publish in the
Federal Register a summary of the comments received, identifying
significant issues raised and commenting on these issues. It also
directs the Agencies to eliminate unnecessary regulations to the extent
that such action is appropriate. Finally, the statute requires the
FFIEC to submit to Congress a report that summarizes any significant
issues raised in the public comments and the relative merits
[[Page 10344]]
of those issues. The report also must include an analysis of whether
the Agencies are able to address the regulatory burdens associated with
such issues or whether these burdens must be addressed by legislative
action. The FFIEC report submitted to Congress following the prior
EGRPRA reviews included a section discussing the Agencies and banking
sector issues and a separate section devoted to the NCUA and credit
union issues. It is likely that the FFIEC will follow a similar
approach in this third EGRPRA review and report process.
Per the objectives of the decennial review, the Board asks the
public to identify areas of the NCUA's regulations that are outdated,
unnecessary, or unduly burdensome. While the Board initially planned to
issue four documents for comment at regular intervals over the course
of approximately 2 years, for efficiency, the Board has decided to
issue this third and final document for comment on the remaining
categories of regulations. The decennial review supplements and
complements the reviews of regulations that the NCUA conducts under
other laws and its internal policies.\6\
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\6\ Interpretive Ruling and Policy Statement (IRPS) 87-2, 52 FR
35231 (Sept. 8, 1987) as amended by IRPS 03-2, 68 FR 32127 (May 29,
2003) (Reflecting the NCUA's commitment to ``periodically update,
clarify and simplify existing regulations and eliminate redundant
and unnecessary provisions.'').
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II. The Decennial Review's Targeted Focus
The decennial regulatory review provides a significant opportunity
for the public and the Board to consider groups of related regulations
and identify possibilities for streamlining and improvement. The
decennial review's overall focus on the totality of regulations will
offer a new perspective in identifying opportunities to update and even
streamline regulations. For example, the decennial review may
facilitate the identification of regulatory requirements that are no
longer consistent with the way credit union business is conducted and
that, therefore, might be eliminated. Of course, regulatory updates
must be compatible with ensuring the continued safety and soundness of
federally insured credit unions and the financial system as a whole and
with the consumer financial protections.
Any resulting regulatory modifications from the NCUA's decennial
review must also be consistent with the NCUA's statutory mandates, many
of which require the issuance of regulations. EGRPRA recognizes that
effective burden reduction may require statutory changes. Accordingly,
as part of this review, the Board is specifically soliciting comment
from the public on, and reviewing the comments and regulations
carefully for, the relationship among burden reduction, regulatory
requirements, policy objectives, and statutory mandates. The Board also
seeks quantitative data about the impact of rules, where available.
The Board views the approach of considering the relationship of
regulatory and statutory change, in concert with EGRPRA's provisions
calling for grouping regulations by type, to provide the potential for
particularly effective burden reduction. The Board anticipates the
decennial review will also contribute to its ongoing efforts to update
and make regulations more efficient. Since 1987, under a formally
adopted NCUA policy, the Board reviews each of its regulations at least
once every 3 years with a view toward eliminating, simplifying, or
otherwise easing the burden of each regulation.\7\ Additionally, in
2025, the Board began a major initiative to review, and revise, as
appropriate, all its regulations. This review follows Executive Order
14192, Unleashing Prosperity Through Deregulation (January 31, 2025).
Further, the Board considers regulatory requirements each time it
proposes, adopts, or amends a rule. For example, under the Paperwork
Reduction Act of 1995,\8\ the Regulatory Flexibility Act,\9\ and
internal agency policies, the NCUA assesses each rulemaking with
respect to the burdens the rule might impose. The Board also invites
the public to comment on proposed rules as generally required by the
Administrative Procedure Act.\10\
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\7\ IRPS 87-2, 52 FR 35231 (Sept. 8, 1987) as amended by IRPS
03-2, 68 FR 32127 (May 29, 2003).
\8\ 44 U.S.C. 3501-3521.
\9\ 5 U.S.C. 610.
\10\ 5 U.S.C. 551-559.
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The Board is particularly sensitive to the impact of agency rules
on small institutions. The Board currently defines ``small entity'' as
a federally insured credit union with less than $100 million in
assets.\11\ The Board is cognizant that each new or amended regulation
has the potential for requiring significant expenditures of time,
effort, and resources to achieve compliance, and that this burden can
be particularly challenging for institutions of smaller asset size,
with fewer resources available.
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\11\ NCUA IRPS 15-1, 80 FR 57512 (Sept. 24, 2015).
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III. The Board's Review Process
EGRPRA contemplates the categorization of regulations by ``type.''
During its prior decennial reviews, the Board developed and published
for comment 10 categories of the NCUA's regulations, including some
that had been issued jointly with the Agencies. The Board believes
these prior categories worked well for the purpose of presenting a
framework for the review and uses the same categories in this third
review.\12\ The categories are:
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\12\ Consistent with EGRPRA's focus on reducing burden on
insured depository institutions, the Board has not included
internal, organizational, or operational regulations in this review.
These regulations impose minimal, if any, burden on federally
insured credit unions.
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<bullet> Applications and Reporting;
<bullet> Powers and Activities;
<bullet> Agency Programs;
<bullet> Capital;
<bullet> Consumer Protection; \13\
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\13\ The Board is seeking comment only on consumer protection
regulations for which it retains rulemaking authority for insured
credit unions under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, Public Law 111-203, 124 Stat. 1376 (2010) (Dodd-
Frank Act).
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<bullet> Corporate Credit Unions;
<bullet> Directors, Officers and Employees;
<bullet> Anti-Money Laundering and Bank Secrecy Act;
<bullet> Rules of Procedure; and
<bullet> Safety and Soundness.
Any rules adopted for the first time since the last decennial
review was completed have been incorporated into the appropriate
category.\14\
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\14\ Commenters should note, in this respect, that for new
regulations that have only recently gone into effect, some passage
of time may be necessary before the effect associated with the
regulatory requirements can be fully and properly understood.
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Although there are other possible ways of categorizing its rules,
the Board continues to maintain that these 10 categories are logical
groupings that are not so broad such that the number of regulations
presented in any one category would overwhelm potential commenters. In
the Board's view, these categories also reflect recognized areas of
stakeholder interest and specialization or are particularly critical to
the health of the credit union system. As was noted during the previous
reviews, some regulations, such as lending, pertain to more than one
category and are included in all applicable categories.
As with the prior decennial reviews, the Board remains convinced
that publishing the NCUA's rules for public comment adjacently, but
separately, from the Agencies is the most effective method for
achieving EGRPRA's burden reduction goals for federally insured credit
unions. In addition to not being
[[Page 10345]]
statutorily required to undertake EGRPRA and owing to differences in
the credit union system as compared to the banking system, there is not
a direct, category by category, correlation between the NCUA's rules
and those of the Agencies. For example, credit union membership, credit
union service organizations, and corporate credit unions are all unique
to credit union operations. Similarly, certain categories identified by
the Agencies in their review process have limited or no applicability
in the credit union sector, such as community reinvestment,
international operations, and securities. The categories developed by
the Board and the Agencies, respectively, reflect these differences.
The Board intends to maintain comparability with the Agencies'
documents to the extent there is overlap or similarity in the issues
and the categories.
At regular intervals, the Board is publishing several Federal
Register documents, each addressing one or more categories of rules.
Each Federal Register document will have a 90-day comment period. This
staggered approach will provide stakeholders with sufficient time to
focus in on discrete issues and provide comments to the Board.
On May 23, 2024, the Board published the first document addressing
the following categories of regulations: Applications and Reporting and
Powers and Activities.\15\ On July 10, 2025, the Board published the
second document addressing the categories of Agency Programs, Capital,
and Consumer Protection.\16\ This third notice and final document
addresses the remaining categories of regulations:
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\15\ 89 FR 45602 (May 23, 2024).
\16\ 90 FR 30596 (July 10, 2025).
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<bullet> Corporate Credit Unions;
<bullet> Directors, Officers and Employees;
<bullet> Anti-Money Laundering and Bank Secrecy Act;
<bullet> Rules of Procedure; and
<bullet> Safety and Soundness.
The Board invites the public to identify outdated, unnecessary, or
unduly burdensome regulatory requirements imposed on federally insured
credit unions in these five categories.
The Board has prepared a chart to assist the public's understanding
of the organization of its review. The chart, set forth at section V.A.
below, presents the five categories of regulations on which the NCUA is
requesting recommendations in this document. The five categories are
shown in the left column. In the middle column are the subject matters
that fall within the categories and in the far-right column are the
regulatory citations.
After the conclusion of the comment period for each decennial
document published in the Federal Register, the Board will review the
comments it has received and decide whether further action is
appropriate with respect to the categories of regulations included in
that document. The NCUA and the Agencies will consult and coordinate
with each other and expect generally to make this determination
jointly, as appropriate, in the case of rules that have been issued on
an interagency basis. Similarly, as appropriate, the NCUA and the
Agencies will undertake any rulemaking to amend or repeal those rules
on an interagency basis. For rules issued by the NCUA, the Board will
review the comments received and independently determine whether
amendments to or repeal of its rules are appropriate.
IV. Request for Recommendations About Five Categories of Regulations:
Corporate Credit Unions; Directors, Officers and Employees; and Anti-
Money Laundering and Bank Secrecy Act; Rules of Procedure; and Safety
and Soundness
The Board seeks public comment on regulations within the final five
categories--Corporate Credit Unions; Directors, Officers and Employees;
Anti-Money Laundering and Bank Secrecy Act; Rules of Procedure; and
Safety and Soundness--that may impose outdated, unnecessary, or unduly
burdensome regulatory requirements on federally insured credit unions.
In addition to comments on regulations in these categories generally,
the Board is requesting comments on certain specific regulations
described below within these categories issued since the last decennial
review. The NCUA's review efforts would benefit most by comments that
cite specific provisions or language and provide reasons why such
provisions should be changed. Suggested alternative provisions or text,
where appropriate, would also be helpful. If the implementation of a
comment would require modifying a statute that underlies the
regulation, the comment should, if possible, identify the needed
statutory change. The Board will consider comments submitted
anonymously.
Specific Issues for Commenters to Consider
While all comments related to any aspect of the review are welcome,
the Board reiterates the posture adopted during the previous decennial
reviews and specifically invites comment on the following issues as
they pertain to the Board's Corporate Credit Unions, Directors,
Officers and Employees, Anti-Money Laundering and Bank Secrecy Act,
Rules of Procedure, and Safety and Soundness rules addressed in this
document. The Board has asked these same questions for each document
issued in connection with the decennial process and invites comments on
these questions for the categories in the previous documents.
<bullet> Need and purpose of the regulations.
<bullet> Question 1: Have there been changes in the financial
services industry, consumer behavior, or other circumstances that cause
any regulations in these categories to be outdated, unnecessary, or
unduly burdensome? If so, please identify the regulations, provide any
available quantitative analyses or data, and indicate how the
regulations should be amended.
<bullet> Question 2: Do any of these regulations impose burdens not
required by their underlying statutes? If so, please identify the
regulations and indicate how they should be amended.
<bullet> Overarching approaches or flexibilities.
<bullet> Question 3: With respect to the regulations in these
categories, could the Board use a different regulatory approach to
lessen the burden imposed by the regulations and achieve statutory
intent?
<bullet> Question 4: Do any of these rules impose unnecessarily
inflexible requirements? If so, please identify the regulations and
indicate how they should be amended.
<bullet> Cumulative effects.
<bullet> Question 5: Looking at the regulations in a category as a
whole, are there any requirements that are redundant, inconsistent, or
overlapping in such a way that taken together, impose an unnecessary
burden that could potentially be addressed? If so, please identify
those regulations, provide any available quantitative analyses or data,
and indicate how the regulations should be amended.
<bullet> Question 6: Have the NCUA and the Agencies issued similar
regulations in the same area that should be considered together as
bodies of regulation, when assessing the cumulative effects on an
insured credit union? If so, please identify the regulations, why they
should be considered together, and any available analyses or data for
the Board's consideration.
<bullet> Question 7: Could any regulations or category of
regulation be streamlined or simplified to reduce unduly
[[Page 10346]]
burdensome or duplicative regulatory requirements?
<bullet> Effect on competition.
<bullet> Question 8: Do any of the regulations in these categories
create competitive disadvantages for one part of the financial services
industry compared to another or for one type of federally insured
credit union compared to another? If so, please identify the
regulations and indicate how they should be amended.
<bullet> Reporting, recordkeeping, and disclosure requirements.
<bullet> Question 9: Do any of the regulations in these categories
impose outdated, unnecessary, or unduly burdensome reporting,
recordkeeping, or disclosure requirements on federally insured credit
unions?
<bullet> Question 10: Could a federally insured credit union
fulfill any of these requirements through new technologies (if they are
not already permitted to do so) and experience a burden reduction? If
so, please identify the regulations and indicate how they should be
amended.
<bullet> Unique characteristics of a type of institution.
<bullet> Question 11: Do any of the regulations in these categories
impose requirements that are unwarranted by the unique characteristics
of a particular type of federally insured credit union? If so, please
identify the regulations and indicate how they should be amended.
<bullet> Clarity.
<bullet> Question 12: Are the regulations in these categories clear
and easy to understand?
<bullet> Question 13: Are there specific regulations for which
clarification is needed? If so, please identify the regulations and
indicate how they should be amended.
<bullet> Impact to small insured institutions. The Board has a
particular interest in minimizing burden on small insured credit unions
(those with less than $100 million in assets).
<bullet> Question 14: Are there regulations in these categories
that impose outdated, unnecessary, or unduly burdensome requirements on
a substantial number of small institutions?
<bullet> Question 15: Has the Board issued regulations pursuant to
a common statute that, as applied by the NCUA and Agencies, create
redundancies or impose inconsistent requirements?
<bullet> Question 16: Should any of these regulations be amended or
repealed to minimize this impact? If so, please identify the
regulations and indicate how they should be amended.
<bullet> Question 17: Have the effects of any regulations in these
categories changed over time that now have a significant economic
impact on a substantial number of small institutions? If so, please
identify the regulations and indicate how they should be amended. The
Board seeks information on (1) the continued need for the rule; (2) the
complexity of the rule; (3) the extent to which the rule overlaps,
duplicates, or conflicts with other Federal rules, and, to the extent
feasible, with State and local governmental rules; and (4) the degree
to which technology, economic conditions, or other factors have changed
in the area affected by the rule.
<bullet> Scope of rules.
<bullet> Question 18: Is the scope of each rule in these categories
consistent with the intent of the underlying statute(s)?
<bullet> Question 19: Could the Board amend the scope of a rule to
clarify its applicability or reduce the burden, while remaining
faithful to statutory intent? If so, please identify the regulations
and indicate how they should be amended.
<bullet> Impact to credit union member-owners.
<bullet> Question 20: Are there regulations in these categories
that unduly or negatively impact credit union member-owners? If so,
please identify the regulations and indicate how they should be
amended.
Specific NCUA Regulations Issued Since the Last Decennial Review \17\
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\17\ For the last decennial review, the Board's third document
requesting public comment on the NCUA's regulations was issued on
June 24, 2015, with a comment period that ended on September 22,
2015. See 80 FR 36252 (June 24, 2015). The Board's fourth and final
document requesting public comment on the NCUA's regulations was
issued on December 23, 2015, with a comment period that ended on
March 22, 2016. See 80 FR 79953 (December 23, 2015). Accordingly,
the Board is currently requesting public comment on the Board's
regulations issued since September 2015, that pertain to Corporate
Credit Unions, Directors, Officers and Employees, and Anti-Money
Laundering and Bank Secrecy Act, and the Board's regulations issued
since March 2016, that pertain to Rules of Procedure, and Safety and
Soundness.
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<bullet> Corporate Credit Unions.
<bullet> In September 2015, the Board issued a final rule to
exclude Central Liquidity Facility-related bridge loans (CLF-related
bridge loans) from the aggregate unsecured lending cap to one borrower
applicable to corporate credit unions. Specifically, under the rule, a
CLF-related bridge loan that is exempt from that cap is a bridge loan
made by a corporate credit union to a natural person credit union where
the natural person credit union has been approved for a loan by the CLF
and is awaiting funding from the CLF. Additionally, the rule excludes
CLF-related bridge loans from the calculation of ``net assets'' and
``net risk weighted assets'' for determining minimum capital
requirements.
<bullet> In November 2017, the Board amended its regulations
governing the scope of corporate credit union activities to revise
provisions on retained earnings and Tier 1 capital. Specifically, the
rule prior definition of ``retained earnings'' included undivided
earnings, regular reserve, reserve for contingencies, supplemental
reserves, reserve for leases, and other appropriations from undivided
earnings as designated by management or the NCUA. The final rule added
``GAAP equity acquired in a merger'' to that list. Expressly including
equity acquired in a merger as retained earnings and referencing GAAP
clarified that this capital is available to cover losses, enhances
transparency, and reduce ambiguity. Additionally, the final rule
removed the requirement to limit perpetual contributed capital (PCC)
counted as Tier 1 capital to the amount of retained earnings. The
regulation was also amended to permit a corporate to include in its
Tier 1 capital all PCC that is sourced from an entity not covered by
federal share insurance.
<bullet> A final rule issued in November 2020 updated, clarified,
and simplified several provisions of the NCUA's corporate credit union
regulation, including: Permitting a corporate credit union to make a
minimal investment in a credit union service organization (CUSO)
without the CUSO being classified as a corporate CUSO under the NCUA's
rules; expanding the categories of senior staff positions at member
credit unions eligible to serve on a corporate credit union's board;
and amending the minimum experience and independence requirement for a
corporate credit union's enterprise risk management expert.
<bullet> Amendments to the corporate credit union regulation in
February 2021 updated the definitions in the regulation and made clear
that corporate credit unions may purchase subordinated debt instruments
issued by natural person credit unions. The final rule also specified
the capital treatment of these instruments for corporate credit unions
that purchase them.
<bullet> Fidelity Bond and Insurance Coverage for Federally Insured
Credit Unions.
<bullet> In July 2019, the Board finalized a rule that amended its
regulations regarding fidelity bonds for corporate credit unions and
natural person credit unions. The rule strengthened a board of
directors' oversight of a federally insured credit union's (FICU)
fidelity bond coverage; ensured an adequate period to discover and file
fidelity bond
[[Page 10347]]
claims following a FICU's liquidation; codified a 2017 NCUA Office of
General Counsel legal opinion that permitted a natural person credit
union's fidelity bond to include coverage for certain CUSOs; and
addressed Board approval of bond forms.
<bullet> Cyber Incident Notification Requirements for Federally
Insured Credit Unions. A final rule issued in March 2023 amended Part
748 of the NCUA's regulations to require a FICU that experiences a
reportable cyber incident to report the incident to the NCUA as soon as
possible and no later than 72 hours after the FICU reasonably believes
that it has experienced a reportable cyber incident. Under the rule, a
FICU is not required to provide a detailed incident assessment to the
NCUA within the 72-hour time frame. The notification requirement was
intended to provide an early alert to the NCUA.
<bullet> Investment and Deposit Activities.
<bullet> Bank Notes. In March 2016, the Board finalized a rule to
amend the maturity requirement for bank notes to be permissible
investments for federal credit unions (FCUs) by removing the word
``original'' from the current requirement that bank notes have
``original weighted average maturities of less than 5 years.
<bullet> Derivatives. A May 2021 final rule amended the NCUA's
derivatives rule. The rule modernized the derivatives rule to make it
more principles-based, while retaining key safety and soundness
components. The changes were intended to provide more flexibility for
FCUs to manage interest rate risk through the use of derivatives.
<bullet> Mortgage Servicing Assets. In December 2021, the NCUA
adopted a final rule to permit FCUs to purchase mortgage servicing
assets from other FICUs subject to certain requirements. Under the
final rule, FCUs with a CAMEL or CAMELS composite rating of 1 or 2 and
a CAMEL or CAMELS Management component rating of 1 or 2, may purchase
the mortgage servicing rights of loans that the FCU is otherwise
empowered to grant, provided these purchases are made in accordance
with the FCU's policies and procedures that address the risk of these
investments and servicing practices.
<bullet> Safe Harbor. The Board issued a final rule in June 2017 to
amend its regulations regarding the treatment by the Board, as
liquidating agent or conservator of a FICU, of financial assets
transferred by the credit union in connection with a securitization or
a participation. The final rule replaced the NCUA's previous safe
harbor for financial assets transferred in connection with
securitizations and participations in which the financial assets were
transferred in compliance with the existing regulation, and defined the
conditions for safe harbor protection for securitizations and
participations for which transfers of financial assets would be made
after the final rule became effective.
<bullet> Appeals Procedures. In October 2017, the Board adopted a
final rule to establish procedures governing appeals to the Board. The
rule established a uniform procedure to apply to agency regulations
that previously had their own embedded appeals provisions. The final
rule replaced those prior provisions. The procedures apply in cases in
which a decision rendered by a regional director or other program
office director is subject to appeal to the Board. The procedures were
intended to improve efficiency, consistency, and provide a better
understanding of the way in which matters under covered regulations may
be appealed to the Board.
<bullet> Supervisory Review Committee; Procedures for Appealing
Material Supervisory.
Determinations. In October 2017, the Board adopted regulatory
procedures for appealing material supervisory determinations to the
NCUA's Supervisory Review Committee (SRC). These procedures
significantly expanded the number of material supervisory
determinations appealable to the SRC to include most agency decisions
that could significantly affect capital, earnings, operating
flexibility, or the nature or level of supervisory oversight of a FICU.
The procedures also included a number of safeguards designed to provide
FICUs with enhanced due process and promote greater consistency with
the practices of the Federal banking agencies.
<bullet> Involuntary Liquidation of Federal Credit Unions and
Claims Procedures.
<bullet> The Board amended Part 709 in May 2018 to update and
clarify the procedures that apply to claims administration for FICUs
that enter involuntary liquidation. Specifically, the final rule
amended the payout priority provision by specifying the conditions that
claims in the nature of severance must meet to be allowed as provable
claims.
<bullet> In February 2021, the Board issued a final rule amending
various parts of the NCUA's regulations to permit low-income designated
credit unions, complex credit unions, and new credit unions to issue
subordinated debt for purposes of regulatory capital treatment. The
final rule also revised the payout priorities in the involuntary
liquidation rule to account for subordinated debt and grandfathered
secondary capital.
<bullet> Real Estate Appraisals.
<bullet> In July 2019, the Board amended the agency's rule
requiring real estate appraisals for certain transactions. The final
rule was intended to accomplish four objectives: Increasing the
threshold below which appraisals are not required for commercial real
estate transactions from $250,000 to $1,000,000; restructuring the rule
to enhance clarity; exempting from the rule certain federally related
transactions involving real estate in a rural area; and making
conforming amendments to the definitions section.
<bullet> In April 2020, the Board amended its rule requiring
appraisals for certain residential real-estate related transactions.
The final rule increased the threshold level below which appraisals are
not required for residential real-estate related transactions from
$250,000 to $400,000. Instead of an appraisal, and consistent with the
requirement for other transactions falling below applicable appraisal
thresholds, FICUs are required to obtain written estimates of market
value of the real estate collateral consistent with safe and sound
practices. For ease of reference, the final rule explicitly
incorporated the existing statutory requirement that appraisals be
subject to appropriate review for compliance with the Uniform Standards
of Professional Appraisal Practice (USPAP). The final rule was
consistent with a final rule, effective October 9, 2019, issued by the
Federal banking agencies.
<bullet> The Board in April 2020 also adopted an interim final rule
amending its regulations requiring appraisals of real estate for
certain transactions. The interim final rule deferred the requirement
to obtain an appraisal or written estimate of market value for up to
120 days following the closing of a transaction for certain residential
and commercial real estate transactions, excluding transactions for
acquisition, development, and construction of real estate. This relief
was provided to allow credit unions to expeditiously extend liquidity
to creditworthy households and businesses in light of strains on the
U.S. economy as a result of COVID-19. The interim final rule was
substantially identical to an interim final rule issued by the Federal
banking agencies. The interim final rule was adopted as final, without
change, in September 2020.
<bullet> In August 2024, OCC, FRB, FDIC, NCUA, CFPB, and the
Federal Housing Finance Agency adopted a final rule to implement the
quality control standards mandated by the Dodd-Frank Wall
[[Page 10348]]
Street Reform and Consumer Protection Act for the use of automated
valuation models (AVMs) by mortgage originators and secondary market
issuers in determining the collateral worth of a mortgage secured by a
consumer's principal dwelling. Under the final rule, institutions that
engage in certain credit decisions or securitization determinations
must adopt policies, practices, procedures, and control systems to
ensure that AVMs used in these transactions to determine the value of
mortgage collateral adhere to quality control standards designed to
ensure a high level of confidence in the estimates produced by AVMs;
protect against the manipulation of data; seek to avoid conflicts of
interest; require random sample testing and reviews; and comply with
applicable nondiscrimination laws.
<bullet> Supervisory Committee Audits and Verifications. A final
rule issued in September 2019 amended the agency's regulations
governing the responsibilities of a FICU to obtain an annual
supervisory committee audit of the credit union. The final rule
implemented recommendations outlined in the agency's Regulatory Reform
Task Force's Regulatory Reform Agenda and was intended to provide
additional flexibility to FICUs. Specifically, the Board: (1) replaced
the Supervisory Committee Guide with a simplified Appendix to Part 715;
(2) eliminated two audit types that FICUs seldom used; and (3)
eliminated a specific deadline for outside, compensated persons to
deliver written audit reports to FICUs.
<bullet> CAMELS Rating System. In October 2021, the Board updated
the NCUA's supervisory rating system from CAMEL to CAMELS by adding the
``S'' (Sensitivity to Market Risk) component to the existing CAMEL
rating system and redefining the ``L'' (Liquidity Risk) component. The
``S'' component was added to enhance transparency and allow the NCUA
and federally insured natural person and corporate credit unions to
better distinguish between liquidity risk (``L'') and sensitivity to
market risk (``S''). The addition of ``S'' was also intended to enhance
consistency between the supervision of credit unions and financial
institutions supervised by the other banking agencies. The effective
The final rule was effective April 1, 2022, and the NCUA implemented
the addition of the ``S'' rating component and a redefined ``L'' rating
for examinations and contacts started on or after that date.
<bullet> Capitalization of Interest in Connection with Loan
Workouts and Modifications. A final rule adopted in June 2021 amended
the NCUA's regulations to remove the prohibition on the capitalization
of interest in connection with loan workouts and modifications. The
final rule also established documentation requirements to help ensure
that the addition of unpaid interest to the principal balance of a
mortgage loan does not hinder the borrower's ability to become current
on the loan. The rule also made several technical changes to the
regulations to improve their clarity and update certain references.
The Board has not identified any rules pertaining to Corporate
Credit Unions, Directors, Officers and Employees,\18\ Anti-Money
Laundering and Bank Secrecy Act, Rules of Procedure, and Safety and
Soundness that would have a significant impact on a substantial number
of small entities. However, the Board will consider any public comments
submitted through the decennial review process and agency experience to
identify regulations it can update that have a significant impact on a
substantial number of small federally insured credit unions.\19\
---------------------------------------------------------------------------
\18\ In December 2024, the Board issued a final rule to further
strengthen succession planning efforts for all consumer FICUs. The
final rule requires that a FICU board of directors establish a
written succession plan that addresses specified positions and
contains certain information. In addition, the board of directors is
required to regularly review the succession plan. The final rule
also requires that newly appointed members of the board of directors
have a working familiarity with the succession plan no later than
six months after appointment. The final rule followed publication of
a July 25, 2024, proposed rule and took into consideration the
public comments received on the proposed rule. In response to
comments, the Board amended the proposal to provide that a credit
union board must review its succession plan no less than every 24
months, as opposed to the annual review that would have been
required under the proposed rule. The Board also revised the
proposed rule by removing loan officers, credit committee members,
and supervisory committee members from the list of FICU officials
that must be covered by the succession plans. In addition,
nonsubstantive changes were made to the wording used in the list of
covered officials for purposes of clarity. The final rule also
streamlined the required contents of the succession plans and no
longer requires that deviations from approved succession plans be
documented in the FICU board's meeting minutes. Further, to help
ensure that FICUs have the necessary time to develop their
succession plans, the Board delayed the effective date of the final
rule until January 1, 2026. Because the final rule only recently
became effective, and therefore the impact of the rule is not yet
clear, the Board is not seeking comment on the final rule in this
decennial review.
\19\ The review will be consistent with the requirements of a
Regulatory Flexibility Act, section 610 review. The Board will
determine whether particular rules should be continued without
change, amended, or rescinded, consistent with the objectives of
applicable statutes, to minimize any significant economic impact of
the rules on a substantial number of small federally insured credit
unions.
---------------------------------------------------------------------------
V. The Board's Review of Regulations Under the Regulatory Flexibility
Act (RFA)
The Board will use the decennial review to satisfy any potential
obligations under section 610 of the RFA.\20\ There are no rules within
the scope of the review that had a significant economic impact on a
substantial number of small entities. Regardless, consistent with the
spirit of section 610 of the RFA, for each rule the Board has issued in
the last 10 years, the Board invites comment on (1) the continued need
for the rule; (2) the complexity of the rule; (3) the extent to which
the rule overlaps, duplicates or conflicts with other Federal rules,
and, to the extent feasible, with State and local governmental rules;
and (4) the length of time since the rule has been evaluated or the
degree to which technology, economic conditions, or other factors have
changed in the area affected by the rule. The purpose of the review
will be to determine whether such rules should be continued without
change, or should be amended or rescinded, consistent with the stated
objectives of applicable statutes, to minimize any significant economic
impact of the rules upon a substantial number of such small entities.
---------------------------------------------------------------------------
\20\ Section 610 of the Regulatory Flexibility Act, 5 U.S.C.
610, imposes a continuing obligation on agencies to review
regulations that may have a significant economic impact upon a
substantial number of small entities, within 10 years after a final
rulemaking is published. The factors agencies consider in evaluating
a rule under 5 U.S.C. 610 are (1) the continued need for the rule;
(2) the nature of complaints or comments received concerning the
rule from the public; (3) the complexity of the rule; (4) the extent
to which the rule overlaps, duplicates or conflicts with other
Federal rules, and, to the extent feasible, with State and local
governmental rules; and (5) the length of time since the rule has
been evaluated or the degree to which technology, economic
conditions, or other factors have changed in the area affected by
the rule.
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A. Regulations About Which Comment Is Currently Requested
------------------------------------------------------------------------
Category Subject Regulation cite
------------------------------------------------------------------------
6. Corporate Credit Unions.... Corporate Credit 12 CFR 704.
Unions.
[[Page 10349]]
7. Directors, Officers, and Loans and lines of 12 CFR
Employees. credit to officials. 701.21(d).
Reimbursement, 12 CFR 701.33.
insurance, and
indemnification of
officials and
employees.
Benefits for employees 12 CFR 701.19.
of Federal credit
unions.
Management Official 12 CFR 711.
Interlocks.
Fidelity Bond and 12 CFR 713.
Insurance Coverage
for Federally Insured
Credit Unions.
General authorities 12 CFR 701.4.
and duties of Federal
credit union
directors.
Golden Parachute and 12 CFR 750.
Indemnification
Payments.
8. Anti-Money Laundering and Filing of reports [of 12 CFR 748.1.
Bank Secrecy Act. known or suspected
crimes or suspicious
transactions].
emsp; Procedures for 12 CFR 748.2.
monitoring Bank
Secrecy Act
compliance.
9. Rules of Procedure......... Involuntary 12 CFR 709.
Liquidation of
Federal Credit Unions
and Adjudication of
Creditor Claims
Involving Federally
Insured Credit Unions
in Liquidation.
Voluntary Liquidation. 12 CFR 710.
Uniform Rules of 12 CFR 747,
Practice and Subpart A.
Procedure.
Local Rules of 12 CFR 747,
Practice and Subpart B.
Procedure.
Procedures for 12 CFR 746,
Appealing Material Subpart A.
Supervisory
Determinations.
Appeals Procedures 12 CFR 746,
That Do Not by Law Subpart B.
Require a Board
Hearing.
10. Safety and Soundness...... Loans to members and 12 CFR 701.21.
lines of credit to
members.
Investments........... 12 CFR 703.
Supervisory Committee 12 CFR 715.
Audits and
Verifications.
Security program...... 12 CFR 748.0.
Guidelines for 12 CFR 748,
Safeguarding Member Appendix A; 12
Information; CFR 748,
Responding to Appendix B.
Unauthorized Access
to Member Information
and Member Notice.
Records Preservation 12 CFR 749.
Program and
Appendices--Record
Retention Guidelines;
Catastrophic Act
Preparedness
Guidelines.
Appraisals............ 12 CFR 722.
Examination........... 12 CFR 741.1.
Liquidity and 12 CFR 741.12.
contingency funding
plans.
Regulations Codified 12 CFR 741,
Elsewhere in NCUA's Subpart B.
Regulations as
Applying to Federal
Credit Unions That
Also Apply to
Federally Insured
State-Chartered
Credit Unions.
Guidance for an 12 CFR 741,
Interest Rate Risk Appendix A.
Policy and an
Effective Program.
------------------------------------------------------------------------
VI. Regulatory Procedures
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) (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 documents 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.
As contemplated by the Economic Growth and Regulatory Paperwork
Reduction Act of 1996, the NCUA is voluntarily reviewing agency
regulations to identify rules that are outdated, unnecessary, or unduly
burdensome. The NCUA divided its regulations into 10 categories and is
publishing several Federal Register documents at regular intervals,
each requesting comment on multiple categories of regulations. This
third and final document requests comment on regulations in the
categories of ``Corporate Credit Unions,'' ``Directors, Officers and
Employees,'' ``Anti-Money Laundering and Bank Secrecy Act,'' ``Rules of
Procedure,'' and ``Safety and Soundness.''
The document and the summary can be found at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
By the National Credit Union Administration Board.
Melane Conyers-Ausbrooks,
Secretary of the Board.
[FR Doc. 2026-04154 Filed 3-2-26; 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.