WASHINGTON–The Defense Credit Union Council (DCUC) has submitted four comment letters to NCUA in response to the agency’s second round of proposed regulatory changes under its ongoing Deregulation Project.
It separately expressed its support for recent legislation to give credit unions more access to the FHLBs.
DCUC expressed support for all four proposed rulemakings, noting the importance of modernizing and streamlining regulations for federally insured credit unions.
The letters include:
Proposal on Segregated Deposit & Collateral Requirements
In its letter regarding the proposed removal of segregated deposit and collateral requirements when a federally insured credit union acts as a surety or guarantor, DCUC endorsed the NCUA’s principles-based supervisory approach. DCUC voiced that aligning these requirements with the agency’s commercial lending framework adopted in 2016 would reduce unnecessary complexity and better reflect the operational realities of credit unions.
Proposal to Eliminate Doc Requirements
DCUC also supported the NCUA’s proposal to eliminate § 701.25b, which currently imposes separate approval and documentation requirements for loans made to other credit unions. DCUC stated that these additional requirements are duplicative and unnecessary, and affirmed that credit union boards are best positioned to determine appropriate approval policies within the framework of existing regulatory limits.
Proposal on Accuracy in Advertising
Regarding the proposed amendments to the Accuracy of Advertising and Notice of Insured Status rule, DCUC said it supported eliminating the standalone requirement that credit unions include a statement in advertisements that they are insured by the NCUA.
DCUC said it explained that share insurance coverage is more effectively communicated through existing required disclosures at branches, principal places of business, and on credit union websites.
Proposal on Reporting Catastrophes
In its fourth letter, DCUC supported the NCUA’s proposal to amend catastrophic act reporting requirements by requiring notification to the “NCUA” rather than a specific regional director and extending the reporting timeframe from five business days to 15 calendar days.
DCUC said it encouraged the agency to reinforce through guidance, outreach, and examiner communication the importance of notifying the agency as soon as possible within that timeframe. DCUC also expressed support for the optional use of online notification tools, such as the NCUA’s existing cybersecurity incident reporting form.
Support for Modernization
“DCUC strongly supports the NCUA’s efforts to modernize and streamline regulations in a way that reduces unnecessary burden while maintaining safety and soundness,” said Jason Stverak, DCUC chief advocacy officer. “These proposed changes reflect a thoughtful, principles-based approach that recognizes credit unions are well-positioned to manage risk responsibly. We appreciate the agency’s continued engagement with the industry and look forward to working collaboratively throughout the Deregulation Project.”
Support for Bill on FHLBs
Separately, DCUC is expressing its strong support for bipartisan legislation introduced by Representatives Vicente Gonzalez (R-TX) and Brian Fitzpatrick (D-PA) that would expand credit union access to the Federal Home Loan Bank System (FHLB).
As the CU Daily reported earlier, the lawmakers, both members of the House Ways and Means Committee, introduced H.R. 7647, the Minimizing Outdated Restrictions that Exclude (MORE) Opportunities for Homeownership Act. The legislation seeks to amend the Federal Home Loan Bank Act to expand eligibility for federally insured credit unions to improve access to low-cost liquidity, collateralized advances, and affordable housing and community investment programs under the Federal Home Loan Bank (FHLB) System.
Practical Solutions
“This is a practical, solutions-oriented step that recognizes the important role credit unions play in providing liquidity, stability, and affordable mortgage lending in communities across the country, including those serving our nation’s servicemembers, veterans, and their families,” Stverak said in a statement. “Ensuring these credit unions have equitable access to the FHLB system strengthens their ability to meet member needs during both calm and crisis.”
Benefits Without Risk
“Credit unions are already heavily regulated, safety-and-soundness focused institutions,” Stverak continued. “Expanding their ability to participate more fully in the FHLB system enhances systemic stability, supports mortgage availability, and reinforces local housing markets without adding risk to taxpayers.”
Stverak said he believes that at its core, the solution offers parity and preparedness.
“When credit unions have access to diversified liquidity channels, they are better positioned to keep mortgage lending flowing, offer competitive rates, and serve families who rely on them,” he said. “We commend Representatives Gonzalez and Fitzpatrick for recognizing this need and advancing a bipartisan solution. DCUC looks forward to working with Congress to move this legislation forward and ensure credit unions have the tools necessary to continue serving those who serve our country.”
