Share Your Feedback on NCUA Deregulation Project

NCUA is conducting a Deregulation Project to review all existing regulations to ensure that they are focused on the safety, soundness, or resilience of credit unions.

NCUA proposes changing or removing regulations that are obsolete, duplicative of statutory requirements, intended to serve as guidance, not requirements, or overly burdensome. To date, four rounds of review have been announced.

Please share your thoughts on the regulations that are currently under review. The full details of the project can be found here; highlights of the four announced rounds are outlined below.

In addition to the regulations under review, what other regulations should be a priority in the review process? Now that the NCUA has made deregulation a priority, there has never been a better time to push any and all ideas for regulatory relief.

Please send your comments to Suzanne Yashewski, Cornerstone League regulatory and compliance counsel.

The first round, with comments due by Feb. 9 are:

1. Corporate Credit Unions: The NCUA proposed removing the requirement that a corporate credit union’s asset and liability management committee must include at least one member from the credit union’s board of directors and eliminating certain annual report filing requirements (12 CFR 704.8 and 704.15).
2. Supervisory Committee Audits: The agency proposed removing provisions deemed unnecessary, duplicative or overly prescriptive in the rules for supervisory committee audits and verifications (12 CFR 715).
3. Safeguarding Member Information: The NCUA proposed removing Appendix A to part 748, clarifying that guidelines for safeguarding member information are nonbinding and will be published as guidance, not regulation (12 CFR 748 Appendix A).
4. Response Programs for Unauthorized Access: The agency proposed removing Appendix B to part 748, clarifying that guidance on response programs for unauthorized access to member information and member notice will be issued separately as guidance (12 CFR 748 Appendix B).

The second round, with comments due by Feb. 27, are:

1. Suretyship and Guaranty Requirements: The NCUA proposed removing segregated deposit and collateral requirements when federally insured credit unions serve as a surety or guarantor to allow institutions greater flexibility in product design (12 CFR 701.20(c)(3), 701.20(d)).
2. Limits on Loans to Other Credit Unions: The agency proposed eliminating the regulatory requirement for board approval and written policies regarding loans to other credit unions, but noted that related statutory requirements would remain in place (12 CFR 701.25(b)).
3. Catastrophic Act Reporting: The NCUA proposed extending the reporting deadline for catastrophic acts from five business days to 15 calendar days and simplifying recordkeeping requirements to enable credit unions to focus on recovery efforts (12 CFR 748.1(b)).
4. Accuracy of Advertising and Notice of Insured Status: The agency proposed rescinding what it deems to be “highly prescriptive” requirements for official advertising statements in order to provide credit unions more flexibility while retaining requirements for accurate advertising and display of the official sign (12 CFR 740.0, 740.5).

 The third round, with comments due by March 16, are:

1. Nondiscrimination Requirements: The NCUA proposed eliminating the rule codified at 12 CFR 701.31, which summarizes fair housing and lending discrimination requirements under the Fair Housing Act. The agency stated that the rule is outdated and duplicative of other federal nondiscrimination laws, and that its removal would reduce confusion and redundancy without altering credit unions’ compliance obligations.
2. Service to Underserved Areas: The agency proposed rescinding Interpretive Ruling and Policy Statement 08-2, which addresses operational policies for serving underserved areas. The agency noted that current requirements are already stated in the Chartering and Field of Membership Manual, rendering the interpretive ruling and policy statement (IRPS) redundant.
3. Community Chartering Policies: The NCUA proposed rescinding Interpretive Ruling and Policy Statement 10-1, which amended community chartering policies. The agency explained that all relevant requirements are now codified in the Chartering and Field of Membership Manual, and that rescinding the IRPS would ease compliance burdens.
4. Corporate Credit Union Chartering: The agency proposed rescinding Interpretive Ruling and Policy Statement 11-02, which provides guidance on chartering corporate federal credit unions. The agency stated that the Federal Corporate Credit Union Chartering Manual contains all necessary procedures, and rescinding the IRPS would reduce regulatory burden.

The fourth round, with an estimated due date of March 29 for comments, are:

1. Changes for Public Unit and Non-Member Shares – 12 CFR 701.32(b)(2)

The board proposed to remove the provision requiring a credit union board to develop a written plan on the intended use of public unit and nonmember shares if those funds, along with any borrowings, would exceed 70 percent of paid-in unimpaired capital and surplus. The change would give Federally Insured Credit Union (FICU) boards the option of developing their own policies for managing public unit and non-member shares within existing aggregate limits, allowing credit union boards to manage their funding sources and reliance on these funds with greater flexibility.

1. Notice of Termination of Excess Insurance Coverage – 12 CFR 741.5

The board proposed to eliminate 12 CFR 741.5 which requires a FICU with share insurance coverage that supplements the coverage provided by the National Credit Union Share Insurance fund to give its members a 30-day notification if it plans to end its supplemental coverage. This change would only require a credit union to notify its members if it terminates previously held supplemental share insurance coverage. The specific 30-day time frame for notification would no longer be required.  

1. Maximum Borrowing Authority – 12 CFR 741.2

The board proposed to remove the maximum borrowing authority from the NCUA’s regulations that establish the requirements for obtaining and maintaining federal share insurance with the Share Insurance Fund. This provision applies to all FICUs. This change would eliminate the borrowing limit that currently applies to Federally Insured State Charted Credit Unions (FISCUs). FISCUs would be subject to any applicable state law requirement. The statutory limit on Federal Credit Union (FCU) borrowing would still apply.

1. Disclosure of Share Insurance – 12 CFR 741.10

The board proposed to eliminate 12 CFR 741.10. Under the current regulation, all FISCUs that are permitted by state law to accept non-member shares or deposits must identify such accounts on all required reports and notify all non-member account holders in writing that their accounts are not insured by the Share Insurance Fund. The board is proposing to remove this section because duplicative of the disclosures FISCUs are already required to make as part of their agreement for maintaining federal share insurance.  This proposed removal would eliminate an unnecessary and redundant requirement.

Contact Suzanne Yashewski, regulatory and compliance counsel, for questions and comments.