League InfoSight Highlight: Succession Planning

By Glory LeDu, CEO, League InfoSight & CU Risk Intelligence 

The NCUA recently finalized its rule on succession planning, which will take effect for federally insured credit unions on Jan. 1, 2026. The final rule requires the board of directors to establish a written succession plan that addresses certain positions and contains specific information outlined within Part 701. Below are a few key differences from the proposed rule:

• The succession plan must be reviewed at least once every 24 months, as opposed to the previous requirement of an annual review.
• The final rule removes loan officers, credit committee members, and supervisory/audit committee members from the list of officials who must be covered by the succession plan.
• The succession plan no longer needs to specifically address unexpected or temporary vacancies in covered positions (although the NCUA still encourages the credit union to do so).
• The final rule no longer requires deviations from strategic plans to be documented in board meeting minutes.

As stated in the proposed rule, credit unions should develop their strategic plan consistent with their size, complexity, and risk. The plan has specific requirements including identifying covered positions, as well as information such as title, term, and/or retirement/departure date. It must also include the credit union’s plan for filling vacancies for each covered position and strategies for recruiting candidates. 

In the background of the final rule, the NCUA indicates that the credit union should also estimate the budgetary impact of executing the succession plan, including costs associated with new hires, such as hiring a recruiting firm, and/or any increased compensation package for new hires. While an exact figure is not required, the credit union should provide a minimum estimate for planning purposes.

Credit unions should be on the lookout for corresponding updates to CU PolicyPro’s Succession Planning Model Policy 1520, and 1520.10: Succession Plan model. We expect these updates to be available in Q1.

Please reach out to us with any questions or concerns at [email protected]. We are happy to help!