ALEXANDRIA, Va. — A new NCUA requirement that will obligate federally insured credit unions to adopt formal succession plans went into effect on Jan 1, but even as CUs have raced to get plans in place, the agency has indicated it doesn’t plan much scrutiny of the plans credit unions have created.
The final rule, adopted unanimously by the NCUA board in December 2024 as part of its 2025–26 budget package, mandates that credit union boards of directors establish a written, board-approved succession plan tailored to their institution’s size, complexity and operational risk.
Under the rule — which amends 12 C.F.R. parts 701 and 741 — the plans must cover key leadership positions, including board members, management officials and senior executive officers, and any additional roles the board deems critical to operations.
Original Reasons for Rule
At the time the rules were put in place by the then NCUA board with support from Democratic appointees Todd Harper and Tanya Otsuka, the agency said the regulations are intended to reduce the risk of unplanned or forced mergers that have historically occurred when a credit union loses essential leadership without a replacement prepared to assume control.
As the CU Daily has regularly reported as part of its reviews of credit union mergers, the lack of a successor to retiring or exiting CEOs and managers is often cited as a reason for seeking to combine with another credit union.
But Harper and Otsuka were fired in April of 2025 by President Trump, leaving Republican appointee Kyle Hauptman as the sole board member and chairman. Under Hauptman, the agency has announced a number of regulatory rollbacks.
Not a ‘Priority’
And that would appear to also apply to the succession planning rule.
“It is not a supervisory priority for 2026 or a required review area for examinations,” an NCUA spokesperson said in a statement to The CU Daily when asked about what the agency had planned for enforcing the succession planning requirement in 2026.
About the Rule
- Written Plan: Boards must adopt and maintain a written succession plan, consistent with the credit union’s operational profile.
- Covered Positions: At a minimum, plans must identify board members, management officials and senior executive officers, plus any other personnel the board considers essential.
- Plan Components: Plans must list titles of covered positions, anticipated vacancy dates (where known), strategies for filling vacancies and recruiting qualified candidates, and an assessment of how diverse skills promote safety and soundness.
- Review Requirement: Boards must revisit and update their plans at least every 24 months.
- Director Familiarity: Newly elected or appointed directors must attain a working familiarity with the succession plan within six months of joining the board.
Resources Available
While it may not be prioritizing enforcement of succession plans, NCUA has made resources available to assist credit unions, including a sample succession-plan template aimed at smaller institutions and online training through its Learning Management System. Federally insured, state-chartered credit unions with their own state requirements will follow those if they don’t conflict with the NCUA rule, according to the agency.
One Response
Test