Powers of Federal Credit Unions

Issuing agencies

Abstract

The NCUA Board (Board) is proposing to amend the NCUA's regulations regarding incidental powers to clarify that federal credit unions (FCUs) are not required to seek an advisory opinion from the NCUA's Office of General Counsel before petitioning the Board to engage in an activity that does not fall within an FCU's preapproved incidental powers.

Full Text

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<title>Federal Register, Volume 91 Issue 198 (Thursday, October 15, 2026)</title>
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[Federal Register Volume 91, Number 198 (Thursday, October 15, 2026)]
[Proposed Rules]
[Pages 65479-65481]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21088]



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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 721

RIN 3133-AF90


Powers of Federal Credit Unions

AGENCY: National Credit Union Administration (NCUA).

ACTION: Proposed rule.

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SUMMARY: The NCUA Board (Board) is proposing to amend the NCUA's 
regulations regarding incidental powers to clarify that federal credit 
unions (FCUs) are not required to seek an advisory opinion from the 
NCUA's Office of General Counsel before petitioning the Board to engage 
in an activity that does not fall within an FCU's preapproved 
incidental powers.

DATES: Comments must be received by December 14, 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-2026-1883. 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#f6b9b1b5bb979f9ab698958397d8919980"><span class="__cf_email__" data-cfemail="602f27232d01090c200e0315014e070f16">[email&#160;protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: John H. Brolin, Senior Staff Attorney, 
Division of Regulations and Legislation, Office of General Counsel, at 
(703) 518-6540 or at 1775 Duke Street, Alexandria, VA 22314.

SUPPLEMENTARY INFORMATION:

I. Introduction

A. Background

    The Federal Credit Union Act (FCU Act) expressly grants FCUs the 
power to, among other activities, purchase, hold, and dispose of 
property; make loans to members; make certain investments; accept 
share, share draft, and share certificate accounts; and sell and cash 
negotiable instruments.\1\ The accompanying incidental powers provision 
states that an FCU may ``exercise such incidental powers as shall be 
necessary or requisite to enable it to carry on effectively the 
business for which it is incorporated.'' \2\
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    \1\ 12 U.S.C. 1757(4)-(7), (12), (15).
    \2\ 12 U.S.C. 1757(17).
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    In 2001, the NCUA adopted regulations providing that FCUs could 
seek advisory opinions from the NCUA's General Counsel as to whether a 
proposed incidental powers activity fits into one of the preapproved 
categories of incidental powers under Sec.  721.3 of the NCUA's 
regulations.\3\ It also established a process for FCUs to petition the 
NCUA to approve new activities or categories of activities.\4\ It is 
clear from the preamble to the 2001 rulemaking that seeking a legal 
opinion from the NCUA's General Counsel is optional.\5\ A great deal of 
confusion has arisen, however, regarding whether FCUs are required to 
obtain an advisory opinion from the NCUA's Office of General Counsel 
before petitioning the Board.
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    \3\ 66 FR 40845 (Aug. 6, 2001).
    \4\ Id.
    \5\ See, Id. at 40855 (providing ``An FCU is not required to 
obtain an opinion from the NCUA's Office of General Counsel . . 
.'').
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    The Board periodically amends rules to clarify confusing 
information. Consistent with confusion experienced by FCUs as a result 
of the language in Sec.  721.4(a) regarding obtaining legal opinion 
letters, this proposed rule would remove the language regarding 
obtaining an advisory opinion before petitioning the Board. The Board 
invites comments on all aspects of this proposal.

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 various acts the Board 
administers.\6\
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    \6\ 12 U.S.C. 1766, 1757, 1789.
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II. Proposed Rule

A. 721.1 What activities does this part cover?

    Current Sec.  721.1 provides, among other things, that part 721 
describes how interested parties may request a legal opinion from the 
NCUA's Office of General Counsel on whether an activity is within an 
FCU's incidental powers or apply to add new activities or categories to 
the regulation. The section provides further that an activity 
determined to be an incidental power for an FCU in an NCUA legal 
opinion to an interested party, or as a result of an application by an 
interested party to add new activities or categories, is recognized as 
an incidental powers activity for all FCUs. For reasons explained in 
more detail in the part of the preamble on Sec.  721.4, the NCUA is 
proposing to remove from Sec.  721.1 the language regarding obtaining 
legal opinions from the NCUA. This information has caused confusion for 
the credit union industry in the past and is unnecessary. Accordingly, 
the proposal would amend Sec.  721.1 to provide that part 721 
authorizes an FCU to engage in activities incidental to its business as 
set out in part 721. The section would provide further that part 721 
also describes how interested parties may apply to add new activities 
or categories to the regulation. The section would also provide that an 
activity approved as a result of an application by an interested party 
to add new activities or categories is recognized as an incidental 
powers activity for all FCUs. Finally, the section would provide that 
part 721 does not apply to the activities of corporate credit unions.

B. Sec.  721.4 How may a credit union apply to engage in an activity 
that is not preapproved as within a credit union's incidental powers?

    Current Sec.  721.4(a) provides, among other things, that to engage 
in an activity that may be within an FCU's incidental powers but that 
does not fall within a preapproved category listed in Sec.  721.3, an 
FCU may submit an application to the Board. Paragraph (a) also outlines 
what information an application must contain and states that before an 
FCU engages in the petition process it should seek an advisory opinion 
from the NCUA's Office of General Counsel as to whether a proposed 
activity fits into one of the authorized categories or is otherwise

[[Page 65480]]

within the FCU's incidental powers without filing a petition to amend 
the regulation.\7\ The last sentence in paragraph (a) and its use of 
the word ``should'' has caused confusion for FCUs wishing to petition 
the Board to engage in a non-preapproved incidental power. FCUs are 
often unsure whether seeking an advisory opinion is mandatory or 
optional. As the NCUA made clear in its 2001 final rule regarding 
incidental powers, an FCU is not required to obtain an opinion from the 
NCUA's Office of General Counsel before petitioning the Board.\8\ 
Moreover, credit unions are always able to ask the NCUA's Office of 
General Counsel questions on any provisions within the NCUA's 
regulations, not just with regard to part 721. It is commonly known 
throughout the credit union industry that credit unions, members, and 
other interested parties can contact the NCUA's Office of General 
Counsel, and the contact information for the office is easy to find and 
clearly displayed on the NCUA's website. Accordingly, consistent with 
other parts of the NCUA's regulations, the proposed rule would remove 
the last sentence of Sec.  721.4(a) to clarify that FCUs are not 
required to obtain an advisory opinion from the NCUA's General 
Counsel's Office before submitting an application to the Board.
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    \7\ (emphasis added).
    \8\ 66 FR 40855 (providing ``An FCU is not required to obtain an 
opinion from the NCUA's Office of General Counsel . . .'').
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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>). In 
summary, the proposed rule would amend the NCUA's regulations regarding 
incidental powers to clarify that FCUs are not required to seek a legal 
opinion from the NCUA's Office of General Counsel before petitioning 
the Board to engage in an activity that does not fall within an FCU's 
preapproved incidental powers.
    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, 14192

    Pursuant to Executive Order 12866 (``Regulatory Planning and 
Review''), a determination must be made whether a regulatory action is 
significant and therefore subject to review by the Office of 
Information and Regulatory Affairs (OIRA), within the Office of 
Management and Budget (OMB) in accordance with the requirements of the 
Executive Order.\9\ 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.\10\ This proposed rule was 
drafted and reviewed in accordance with Executive Order 12866 and 
Executive Order 13563. OIRA has determined that this proposed rule is 
not a ``significant regulatory action'' as defined by section 3(f) of 
Executive Order 12866.
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    \9\ 58 FR 51735 (Oct. 4, 1993).
    \10\ 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.\11\ This proposed rule is not an Executive Order 14192 
regulatory action because this rule is not significant under Executive 
Order 12866.
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    \11\ 90 FR 9065 (Feb. 6, 2025).
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C. Regulatory Flexibility Act

    The Regulatory Flexibility Act \12\ 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.\13\ For purposes of this 
analysis, the NCUA considers small credit unions to be those having 
under $100 million in assets.\14\ The Board fully considered the 
potential economic impacts of the regulatory amendments on small credit 
unions.
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    \12\ 5 U.S.C. 601 et seq.
    \13\ 5 U.S.C. 605(b).
    \14\ 80 FR 57512 (Sept. 24, 2015).
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    This proposed rule would amend the NCUA's incidental powers 
regulation to remove references to an optional process for FCUs wishing 
to apply to the Board to engage in an activity that does not fall 
within an FCU's preapproved incidental powers. This proposal would not 
impose any requirements on interested parties. 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 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.\15\ The proposed 
rule does not have substantial direct effects on the states, on the 
relationship between the National Government and the states, or on the 
distribution of power and responsibilities among the various levels of 
government. The proposed rule does not create or alter existing rights 
or requirements that apply to federally insured, state-chartered credit 
unions or affect the ability of state regulatory agencies to examine, 
supervise, or regulate such credit unions. Part 721 applies solely to 
FCUs. The NCUA has therefore determined that this proposed rule does 
not constitute a policy that has federalism implications for purposes 
of the executive order.
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    \15\ ``Federalism,'' E.O. 13,132 (Aug. 10, 1999).
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F. Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this rule will not affect family well-
being within the meaning of section 654 of the Treasury and General 
Government Appropriations Act.\16\ The proposed

[[Page 65481]]

rule merely removes confusing regulatory provisions, which discusses an 
optional process for FCUs to obtain advisory opinions from the NCUA's 
Office of General Counsel.
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    \16\ Public Law 105-277, sec. 654, 112 Stat. 2681, 2681-528 
(1998).
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List of Subjects in 12 CFR Part 721

    Credit Unions.

    By the National Credit Union Administration Board, this 13th day 
of October, 2026.
Melane Conyers-Ausbrooks,
Secretary of the Board.

    For the reasons discussed in the preamble, the Board proposes to 
amend 12 CFR part 721 as follows:

PART 721--INCIDENTAL POWERS

0
1. The authority section continues to read as follows:

    Authority:  12 U.S.C. 1757(17), 1766 and 1789.

0
2. Revise Sec.  721.1 to read as follows:


Sec.  721.1  What does this part cover?

    This part authorizes a federal credit union (you) to engage in 
activities incidental to your business as set out in this part. This 
part also describes how interested parties may apply to add new 
activities or categories to the regulation. An activity approved as a 
result of an application by an interested party to add new activities 
or categories is recognized as an incidental powers activity for all 
federal credit unions. This part does not apply to the activities of 
corporate credit unions.


Sec.  721.4  [Amended]

0
3. In Sec.  721.4, remove the last sentence in paragraph (a).

[FR Doc. 2026-21088 Filed 10-14-26; 8:45 am]
BILLING CODE 7535-01-P


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