WASHINGTON — America’s Credit Unions is urging NCUA Chairman John Crews to expand credit unions’ lending and investment flexibility, modernize membership rules and reduce reporting and examination burdens, arguing that existing requirements can divert resources from member services.
In an Oct. 5 letter, the trade group outlined recommendations covering everything from loan interest rate limits and business lending to inherited deposits, financial technology investments and consumer complaints.
The association said unnecessary compliance expenses disproportionately affect smaller credit unions, which have less income available to absorb those costs.
Lending And Funding Flexibility
America’s Credit Unions urged the NCUA to replace the fixed 18% federal credit union loan interest rate ceiling with a floating limit tied to market rates, potentially through a fixed spread above the prime rate.
The group argued that a fixed ceiling squeezes lending margins when funding costs rise, making it harder to serve higher-risk borrowers and potentially pushing them toward more expensive lenders.
According to the letter, 76% of federal credit unions had loans carrying rates above 15% as of Sept. 30, 2025. Those loans had an average rate of 17.3%.
If the agency does not adopt a floating ceiling, the association requested that it maintain a ceiling of at least 18%.
Other lending recommendations included:
- Raising the threshold for business loans excluded from the regulatory definition of a commercial loan from $50,000 to $250,000.
- Replacing the 45-day overdraft cure period with a “reasonable and universally applicable” timeframe. The group cited a 60-day allowance under generally accepted accounting principles.
- Clarifying loan participation rules and eliminating prescriptive concentration limits involving individual borrowers and originating lenders.
- Aligning appraisal requirements with federal banking and housing regulators and allocating automated valuation model compliance responsibilities appropriately to companies that develop and control the models.
The association also supported eliminating a separate written funding plan requirement for certain public unit and nonmember deposits and removing a federal borrowing regulation it described as duplicative for federal credit unions. Statutory borrowing limits would continue to apply to federal credit unions, while state law would govern state-chartered institutions’ borrowing authority, the group said.
Membership And Inherited Deposits
The association asked the NCUA to reconsider whether websites and online banking platforms can qualify as service facilities when multiple common bond federal credit unions seek to add groups to their fields of membership.
It said membership rules should better reflect consumers’ increasing reliance on digital banking.
The group also sought expanded eligibility for deceased members’ immediate family and household members, a broader definition of immediate family and membership eligibility for designated payable-on-death or in-trust-for beneficiaries.
Beneficiary eligibility should begin when the designation is made and continue after the member’s death, the association said.
Under existing rules described in the letter, beneficiaries outside a credit union’s field of membership must move inherited funds elsewhere. The association cited Cerulli Associates projections that $124 trillion will transfer through 2048, including $105 trillion to heirs.
Technology Investment Authority
America’s Credit Unions urged the NCUA to authorize investments in financial technology providers outside the limit on credit union service organization investments, which it said caps federal credit union investments at 1% of paid-in and unimpaired capital and surplus.
The group argued that services such as automated underwriting, digital accounts, cybersecurity and artificial intelligence could qualify as activities related to credit unions’ routine operations.
It also warned that the investment limit could constrain federal credit unions’ ability to capitalize stablecoin-issuing subsidiaries under the GENIUS Act.
Reporting And Examination Changes
The association called for streamlined Call Reports through automation, materiality thresholds, standardized calculations and closer alignment with generally accepted accounting principles.
It requested clearer instructions on loan classifications, borrowing capacity, CUSO reporting, pledged assets, delinquency calculations and commercial loans.
The group also urged the NCUA to:
- Direct examiners to accept any compliance method satisfying applicable requirements and tie findings to specific statutes or regulations.
- Avoid pressuring credit unions to hold capital above regulatory requirements without documenting an institution-specific safety and soundness concern.
- Adopt a regulatory definition of “unsafe or unsound practice” and consistent standards for examination findings comparable to those adopted by the OCC and FDIC.
- Provide clearer, consistent expectations for lending-related incentive compensation, including senior management arrangements.
- Allow more flexible catastrophic act reporting deadlines and eliminate duplicative reports when cyber incidents trigger multiple requirements.
The association said current expected credit loss accounting can strain capital and lending capacity. It pointed to broader access to the NCUA’s simplified CECL tool and guidance permitting independent internal validation of methodologies as measures that help reduce costs.
Consumer And Administrative Rules
America’s Credit Unions asked the NCUA to require consumers filing complaints with its Consumer Assistance Center to certify that they first attempted to resolve the issue with their credit union.
The group attributed rising complaint volume partly to AI-generated search results and social media encouraging consumers to approach federal regulators first.
It also supported retaining a uniform federal framework for member inspection rights while updating protections against burdensome or abusive requests.
Additional recommendations included simplifying Community Development Revolving Loan Fund applications, expanding pathways to low-income designation and considering a lower qualifying threshold.
The association supported proposals to remove the official advertising statement requirement and an outdated NCUA nondiscrimination regulation, arguing that reliance on outdated provisions could create compliance problems.
Finally, it asked the NCUA to work with the Consumer Financial Protection Bureau to raise the closed-end mortgage reporting threshold under the Home Mortgage Disclosure Act from 25 loans to at least 500. The association acknowledged that the NCUA does not have independent rulemaking authority over that threshold.
