WASHINGTON–The Defense Credit Union Council has written to NCUA in support of its proposed rule to codify the elimination of reputation risk from its supervisory and examination program.
America’s Credit Unions has also weighed in in favor of the plan.
Ini its letter, DCUC expressed strong support for the proposed rule, noting sound policy improves the efficiency, clarity, and fairness of credit union supervision while aligning with recent executive directives aimed at preventing politicized or unlawful debanking.
As the CU Daily has reported, the proposal would prohibit the NCUA from taking supervisory or adverse actions against credit unions based solely on reputation risk or on a person’s or entity’s lawful political, social, cultural, or religious views.
‘Inherently Subjective’
“Reputation risk is inherently subjective and difficult to measure consistently, which can lead to uncertainty and inconsistent supervision,” DCUC Chief Advocacy Officer Jason Stverak said in a statement. “We commend the NCUA for removing reputation risk from its supervisory framework and for proposing to codify this change. We believe it promotes further transparency, predictability, and fairness while ensuring examiners remain focused on objective safety and soundness risks.”
In its letter, DCUC shared that its members operate in highly regulated environments and have extensive experience with NCUA examinations. DCUC agreed with the agency’s assessment that reputation risk lacks concrete metrics and can divert resources away from core financial risks such as credit, liquidity, and interest rate risk.
DCUC also supported the proposed definitions of “reputation risk” and “adverse action,” stating they provide needed clarity for both examiners and credit unions.
Wants to See Rule Paired With Training
DCUC is encouraging the agency to pair the final rule with examiner training and industry outreach to ensure consistent implementation across regions.
“We recommend that the NCUA issue clear written guidance, host an industry webinar following finalization of the rule, and create a centralized webpage summarizing recent supervisory and regulatory changes. Doing so will ensure credit unions have the assistance and support they need when it comes to compliance and implementation,” Stverak added in a statement.
NCUA Releases Updated CECL Tool
Separately, NCUA has released its latest version of a tool for navigating current expect credit loss (CECL) accounting requirements for small, complex credit unions.
NCUA said the tool is an option for estimating the allowance for credit losses on loans and leases. It is intended for use in submitting quarterly call reports.
This latest update, the agency said, provides the latest life-of-loan (weighted average remaining maturity) factors.
“For credit unions currently using the Simplified CECL Tool, the December 2025 release facilitates calculating the credit loss expense on loans and leases for the period ending Dec. 30, 2025,” NCUA said in a release.
