ALEXANDRIA, Va.–NCUA is reporting more than enough employees have agreed to voluntarily leave the agency as part of the Trump Administration’s workforce reduction order, and that by Jan. 1, 2026 it will have reduced headcount to approximately 953 employees from its current approximately 1,214.
The agency is projecting savings of approximately $75 million in 2026; it will not see the savings in 2025 due to the retirement bonuses being paid and the fact many workers will remain on the payroll through year-end even though they have left NCUA.
The update on NCUA’s Voluntary Separation Program (VSP) came during the agency’s board meeting, which had just one board member on hand—Chairman Kyle Hauptman–following the controversial firings of Todd Harper and Tanya Otsuka by the White House.
Hauptman said the meeting “may be the most important board briefing I’ve ever been a part of because of how long this is going to affect the agency.”
Executive Order
The overall staff reductions follow Executive Order 14210, which also includes a hiring freeze. The executive order only allows the hiring of one person for every four people who depart, but even that can’t occur until the freeze expires.
NCUA responded to the executive order with a voluntary program to incentivize departures that offered bonuses of $50,000 for doing so. While NCUA had prepared a two-round plan to reduce the workforce, Executive Director Larry Fazio and Deputy Director Amanda Parkhill said it hit its targets during round one, meaning the agency will not have to terminate anyone involuntarily.
Hitting the ‘Objective’
Fazio said the incentivized departures have allowed NCUA to hit its “downsizing objective (while being) cost effective and less operationally disruptive than a traditional involuntary reduction in force.”
The VSP was approved by the NCUA board at its March 21 meeting. It opened to NCUA staff on March 31 and closed on May 5. More than 240 NCUA staff are expected to leave, 70% of whom work out of its headquarters office, while 30% are in the regional offices.
Fazio said that there will be challenges due to the departures, but the situation will be “manageable” due to improved collaboration and identifying people for new roles in higher priority areas. He credited agency staff—as did Hauptman in remarks later—for putting forth ideas for improving efficiencies.
Fazio said NCUA will be able to “continue to meet its mission” as it transitions to a “new streamlined future state.”
New Efficiencies
He added the new efficiencies include:
- Amending or eliminating any tasks and projects that are unnecessary or low value
- Updating regulations
- Implementing revisions to delegations of authority
- Making prudent adjustments to exam schedule policy (see separate story here).
- Modifying office operating procedures and workflows to streamline tasks
- Leveraging technology, such as artificial intelligence tools to promote operational efficiencies
Among the changes already implemented, Fazio said, is that regional directors have been given more flexibility to extend the time between examinations for very healthy and well-run credit unions.
What Was Offered
Fazio outlined the various programs available to NCUA employees, as seen in the slide below.
“The VSP was designed to incentivize departures in 2025,” Fazio explained. “Under the program the last day of employment with NCUA for participating employees can be no later than Dec. 31st 2025. Participating employees can choose to end their employment with the agency before Dec. 31st, 2025, and some, in fact, have. The agency was very clear to employees this was a voluntary program.”
Round one included the separation incentive payment of $50,000, along with other changes, such as waivers to any continuing service relocation agreement stipulations, rules related to telecommuting and more, Fazio said.
The Primary Incentive
“The primary incentive is that the employee was placed on paid administrative leave within four weeks of signing the agreement until their employment with the agency ends, which again could be no later than Dec. 31st, 2025,” Fazio said. “While on paid administrative leave the employee continues to receive all pay and benefits until their retirement or separation date.”
With certain exceptions related to conflicts of interest, NCUA staff who leave can take another job at any time.
Fazio said if, at the request of NCUA management, an employee agreed to postpone paid administrative leave, that employee would receive in January of 2026 an additional payment that equals half the employee’s annual salary pro-rated for the period between signing the agreement and when the employee was ultimately placed on paid administrative leave.
Performance-Based Incentives
In addition to other technical requirements around the VPS, Fazio said the plan also accounts for any performance-based incentives for the performance year that ends on Sept. 30 that the employee would typically receive in January each year, had they remained.
For employees in the Deferred Resignation Program, the amount typically paid is $15,000. Fazio said there are 17 executives in the DRP who will likely receive somewhere between $29,500 and $42,500.
Fazio added the NCUA DRP plan is modeled on a similar program at the Office of Personnel Management (OPM).
The Results
The results of the VSP can be seen in the slide below.
The exact number who are leaving won’t be known until Memorial Day, which is the deadline for approximately 14 employees who quality to exercise their right of recission.
“We’ll end up somewhere between 243 and 257 once that rescission period ends,” Fazio said during the meeting. “We extend our heartfelt gratitude for their service to the United States and to the credit union movement and we wish them the best in the next chapter of their lives.”
Loss of Institutional Knowledge
Fazio said the higher enrollment level at the headquarters office reflects that there are more senior staff people who “have been around a little bit longer, so that’s somewhat to be expected. I just want to emphasize we will be able to manage the impact associated with the staff departures and have already started measures to do that.”
He acknowledged, however, “Some of our most seasoned and experienced leaders and managers and experts are participating in the VSP. Although we’ll be losing some institutional knowledge, to be sure, we are confident the next generation of the insurance workforce is up to the challenge.”
Hiring Plans
Deputy Director Parkhill said NCUA expects to do no hiring before 2026 and then any hiring that does occur will only be in areas of “highest need.”
The agency is not projecting any significant savings to its budget in 2025 due to the terms of the retirement/separation offers, but does expect those savings—approximately $75 million—to appear in the 2026 budget.
In addition, she said NCUA has formed an internal team to parse through all of the ideas and suggestions being submitted around creating additional savings, such as changing policies and driving new efficiencies.
Credit unions can send suggestions to [email protected]
Hauptman: ‘A Good Deal’
Following the presentation, NCUA Chairman Kyle Hauptman said the type of workforce reductions NCUA is going through “happens every day” in the private sector, including at credit unions, adding that “people in the private sector usually don’t nearly get this good of a deal.”
He emphasized that no one is leaving involuntarily and that no one was even “nudged out the door.”
“You can’t go down 20% in employees and not have issues, so I appreciate the patience and understanding of everybody at NCUA,” Hauptman said. “It has been quite a process. This may be the most important board briefing I’ve ever been a part of because of how long this is going to affect the agency.”
The CU Daily reports separately, Hauptman’s full, prepared comments during the meeting.
Eyes on the Ball
Hauptman said he anticipates some of the $75 million being saved will be returned to credit unions in the form of lower operating fees.
He also stressed that despite the reductions NCUA will not be “taking its eyes off the ball” and will be focused on protecting the insurance fund. He praised NCUA staff for their “professionalism” during the workforce reduction process.
The CU Daily reports separately, Hauptman’s full, prepared comments during the meeting.
Defense Council Responds
Following the NCUA board meeting, the DCUC issued a statement saying, “The Defense Credit Union Council (DCUC) commends Chairman Kyle Hauptman for his professionalism and steady leadership during the May 22, 2025, National Credit Union Administration (NCUA) Board meeting. His commitment to transparency and stability has been instrumental in maintaining confidence within the credit union system.
“The reduction in NCUA staffing raises concerns among some credit unions regarding the agency’s capacity to effectively supervise and support credit unions. DCUC will closely monitor the impact of these changes and collaborate with the NCUA to identify and address any challenges our member credit unions may encounter. Ensuring that the NCUA retains the necessary resources to fulfill its mission is paramount to the continued health of the credit union sector.
“DCUC has consistently advocated for a strong and independent NCUA as a cornerstone of the credit union movement. An autonomous regulatory body is essential for preserving the unique, member-focused nature of credit unions and for safeguarding the financial well-being of the 142 million Americans they serve. Our commitment to this principle remains unwavering, and we will persist in our efforts to support policies that reinforce the NCUA’s independence and effectiveness.
“We extend our gratitude to Chairman Hauptman and to all NCUA staff who continue to uphold the agency’s vital role in the financial ecosystem. DCUC stands ready to work alongside the NCUA to navigate these challenges and to ensure that credit unions remain a resilient and trusted resource for their members.”
