ARLINGTON, Va. — The National Association of State Credit Union Supervisors (NASCUS) is urging NCUA to reconsider portions of its proposal to revise share insurance regulations, saying the changes could make it more difficult for federally insured state-chartered credit unions (FISCUs) to determine which federal rules apply to them.
In a comment letter to NCUA on its proposed amendments to 12 CFR Part 741, Requirements for Insurance, NASCUS said it supports the agency’s broader effort to streamline regulations and reduce unnecessary regulatory burden. However, the organization said removing certain cross-references from Part 741 could have unintended consequences for state-chartered credit unions, according to NASCUS.
NASCUS said Part 741 currently serves as a practical roadmap for credit unions, state regulators, compliance officers and examiners by identifying which NCUA regulations apply to FISCUs. Eliminating those codified references, the organization argued, would require institutions to search multiple sections of the NCUA’s regulations—many of which are written primarily for federal credit unions—to determine applicable requirements.
Flawed, But Valuable
“Our experience as users of the regulations has demonstrated to us that the structure of Part 741, while flawed, provides valuable information to assist in the identification of NCUA rules and regulations that may apply to state-chartered credit unions,” NASCUS said in its letter.
The association also objected to the NCUA’s suggestion that a non-regulatory reference list could replace the existing cross-references. While acknowledging that such a list could serve as a useful reference tool, NASCUS said guidance does not provide the same legal authority, notice-and-comment protections or publication requirements as regulations.
Instead, NASCUS called on the NCUA to undertake a more comprehensive restructuring by consolidating regulatory text applicable to FISCUs within Part 741. According to the association, such an approach would provide clearer guidance, reduce confusion and better support state-chartered credit unions, particularly those with limited compliance resources.
Offers to Assist With Undertaking
NASCUS acknowledged that reorganizing the agency’s regulations would be a significant undertaking but said it is willing to work collaboratively with the NCUA on a broader modernization effort.
Although it disagrees that the current proposal would benefit FISCUs, NASCUS said it appreciates the NCUA’s commitment to its Deregulation Project and its willingness to begin a broader discussion on modernizing federal share insurance regulations. According to NASCUS, that dialogue presents an opportunity to improve regulatory clarity while reducing unnecessary burden on state-chartered credit unions.
