ARLINGTON, Va. — The National Association of State Credit Union Supervisors urged the National Credit Union Administration to simplify regulations affecting federally insured, state-chartered credit unions and modernize several key regulatory requirements as part of the agency’s ongoing review of its rules, according to a comment letter submitted by NASCUS.
The comments were filed in response to the NCUA’s voluntary review of regulations under the Economic Growth and Regulatory Paperwork Reduction Act, or EGRPRA, which is intended to identify outdated, unnecessary or overly burdensome regulations.
According to NASCUS, one of its primary recommendations is for the NCUA to improve regulatory clarity for federally insured, state-chartered credit unions, often referred to as FISCUs. NASCUS said the current regulatory framework can be difficult to navigate because institutions frequently must consult multiple sections of NCUA regulations to determine which requirements apply.
Reducing Burdens and More
NASCUS said consolidating and simplifying regulations applicable to FISCUs would reduce compliance burdens, improve operational efficiency and benefit both credit unions and examiners.
The organization also called on the NCUA to review corporate credit union regulations that were adopted in the aftermath of the Great Recession. According to NASCUS, many of those provisions may no longer fully reflect current market and operating conditions.
NASCUS said the agency should evaluate areas including investment concentration limits, liquidity management requirements and balance sheet flexibility to ensure corporate credit unions can continue supporting the broader credit union system while maintaining appropriate safeguards.
Additional recommendations outlined in the letter include modernizing fidelity bond requirements through a more principles-based framework, supporting proposed updates to management official interlock thresholds and streamlining the NCUA’s supervisory appeals process.
A ‘Clearer Pathway’
According to NASCUS, reforms to the appeals process would provide clearer pathways for review and allow disputes to be resolved more quickly.
“NASCUS appreciates the NCUA Board’s commitment to regularly evaluating its regulations and engaging stakeholders throughout that process,” NASCUS President and CEO Brian Knight said in a statement released by the organization.
“The NCUA has demonstrated a willingness to consider meaningful improvements that reduce unnecessary burden while maintaining a strong focus on safety and soundness,” Knight said, according to NASCUS. “These reviews help ensure regulations remain practical, effective, and aligned with the realities facing today’s credit unions.”
NASCUS also encouraged the NCUA to continue supporting legislative changes designed to strengthen the Central Liquidity Facility and preserve liquidity resources available to the credit union system.
