ALEXANDRIA, Va. – The National Credit Union Administration has announced the fifth round of proposed regulatory changes associated with its Deregulation Project. The agency said the project is an ongoing review of NCUA’s regulations to ensure regulations are focused on credit unions’ safety, soundness, and resilience.
The new announcement of three proposals brings to 19 the number of proposals the agency has announced to date as part of the project.
The three proposals include:
Conversion of Insured Credit Unions to Mutual Saving Banks – 12 CFR 708a
The Proposal: The Board proposes to reduce regulatory burden and increase flexibility by eliminating some procedural, disclosure, and communications requirements for converting insured credit unions to mutual saving banks.
The Impact on Credit Unions: According to NCUA, among other things, the proposed change would simplify regulatory compliance for conversion disclosures and allow credit unions the flexibility to design disclosures that are effective and clear for their members.
The Proposal: The Board proposes to retain the core disclosure and notification requirements when a credit union’s members vote on a decision to merge or terminate federal share insurance coverage and convert to private insurance, but eliminate prescriptive requirements associated with those disclosures.
The Impact on Credit Unions: According to NCUA, the proposed change would reduce unnecessary burden. “It would provide credit unions with greater flexibility in designing effective communications, while still ensuring that members receive clear and prominent notice of a proposed termination of federal insurance,” NCUA said.
The Proposal: The Board proposes to rescind IRPS 06-1 because the current Field of Membership (FOM) requirements are in the Chartering Manual.
The Impact on Credit Unions: According to NCUA, “This change would eliminate a redundant standard currently listed in more than one area. This would ease the compliance burden on federal credit unions by limiting the number of sources they must check to ensure compliance with applicable community chartering and FOM requirements.”
The Earlier Proposals
Changes for Public Unit and Non-Member Shares – 12 CFR 701.32(b)(2)
“The Board proposes to remove the provision requiring a credit union board to develop a written plan on the intended use of public unit and nonmember shares if those funds, along with any borrowings, would exceed 70% of paid-in unimpaired capital and surplus,” NCUA said.
The Impact: “The change would give federally Insured credit union (FICU) boards the option of developing their own policies for managing public unit and non-member shares within existing aggregate limits, allowing credit union boards to manage their funding sources and reliance on these funds with greater flexibility,” NCUA said.
For info, go here.
Notice of Termination of Excess Insurance Coverage – 12 CFR 741.5
“The Board proposes to eliminate 12 CFR 741.5 which requires a FICU with share insurance coverage that supplements the coverage provided by the National Credit Union Share Insurance fund to give its members a 30-day notification if it plans to end its supplemental coverage,” the agency stated.
The Impact: “This change would only require a credit union to notify its members if it terminates previously held supplemental share insurance coverage,” the agency said. “The specific 30 day time-frame for notification would no longer be required.”
For info, go here.
Maximum Borrowing Authority – 12 CFR 741.2
“The Board proposes to remove the maximum borrowing authority from the NCUA’s regulations that establish the requirements for obtaining and maintaining federal share insurance with the Share Insurance Fund,” NCUA said. “This provision applies to all FICUs.”
The Impact: “This change would eliminate the borrowing limit that currently applies to federally insured state charted credit unions (FISCUs),” according to the agency. “FISCUs would be subject to any applicable state law requirement. The statutory limit on federal credit union (FCU) borrowing would still apply.”
For info, go here.
Disclosure of Share Insurance – 12 CFR 741.10
“The Board proposes to eliminate 12 CFR 741.10,” NCUA said. “Under the current regulation, all FISCUs that are permitted by state law to accept non-member shares or deposits must identify such accounts on all required reports and notify all non-member account holders in writing that their accounts are not insured by the Share Insurance Fund. The Board is proposing to remove this section because duplicative of the disclosures FISCUs are already required to make as part of their agreement for maintaining federal share insurance.”
The Impact: “This proposed removal would eliminate an unnecessary and redundant requirement,” NCUA said.
For info, go here.
Changes for Surety and Guarantor Requirements – 12 CFR 701.20(c)(3) and 701.20(d)
NCUA is proposing changes to segregated deposit and collateral requirements.
For more information on this proposal: https://www.federalregister.gov/public-inspection/2025-23857/suretyship-and-guaranty-segregated-deposit-and-collateral
Changes for Limits on Loans to Other Credit Unions – 12 CFR 701.25(b)
NCUA is proposing to remove a requirement that is duplicative of statute and unduly burdensome regarding loans to credit unions.
For more information on this proposal: https://www.federalregister.gov/public-inspection/2025-23855/limits-on-loans-to-other-credit-unions
Changes for Catastrophic Reporting – 12 CFR 748.1(b)
NCUA is proposing changes related to catastrophic act reporting.
For more information on this proposal: https://www.federalregister.gov/public-inspection/2025-23856/catastrophic-act-reporting
Changes for Accuracy of Advertising and Notice of Insured Status – 12 CFR 740.0 and 740.5
NCUA is proposing to remove overly prescriptive, obsolete requirements related to advertising.
Changes for Corporate Credit Unions – 12 CFR 704.8 and 704.15
NCUA is proposing to amend its regulations for corporate credit unions by removing the requirement that a corporate credit union’s asset and liability management committee (ALCO) must have at least one member who is also a member of the corporate credit union’s board of directors.
Changes for Supervisory Committee Audits and Verifications – 12 CFR 715
NCUA is proposing to amend its regulations governing supervisory committee audits to eliminate unnecessary, redundant, and overly prescriptive provisions.
Changes for Guidelines for Safeguarding Member Information – 12 CFR 748 Appendix A
NCUA is proposing to remove Appendix A to part 748, guidelines for safeguarding member information, from the Code of Federal Regulations.
Changes for Guidance on Response Programs for Unauthorized Access to Member Information and Member Notice – 12 CFR 748 Appendix B
NCUA is proposing to remove Appendix B to part 748, guidance on response programs for unauthorized access to member information and member notice, from the Code of Federal Regulations.
Comments on all four were due Feb. 9.
