The NCUA Deregulation Project Continues
We have previously blogged on the NCUA’s Deregulation Project which is an ongoing review of NCUA’s regulations to ensure regulations are focused on credit unions’ safety, soundness, and resilience, as well as to reduce compliance burdens or any duplicative requirements. In the first blog we posted on January 22, 2026, my colleague Kelsey Nelson wrote about NCUA’s first three rounds of its project. In the second blog on February 3, 2026, my colleague Keith Schostag wrote about NCUAs fourth round. Today, we are keeping you up to date with the project by providing you with an overview of the fifth through seventh rounds. Below are those proposed rules.
Fifth Round
Conversions of Insured Credit Unions to Mutual Savings Banks: 12 CFR 708a
NCUA is proposing to reduce regulatory burden and increase flexibility by amending Part 708a to eliminate some of the procedural, disclosure, and communications requirements for converting insured credit unions to mutual saving banks.
NCUA is proposing to eliminate specific formatting requirements for notifications under Part 708b when a credit union’s members vote on a decision to merge or terminate federal share insurance coverage and convert to private insurance.
Organization and Operation of Federal Credit Unions: Interpretive Ruling and Policy Statement (IRPS) 06-1
NCUA is proposing to rescind IRPS 06-1 which addresses field of membership (FOM) rules because the current FOM requirements are already in the Chartering and Field of Membership Manual.
Sixth Round
Post-Election Training for New Board Members: 12 CFR 701.4(b)(3)
NCUA is proposing to remove the regulatory requirement under section 701.4(b)(3) for a credit union director to have or obtain expertise in finance and accounting within six months after appointment.
Loan Compensation/Commission: 12 CFR 701.21(c)(8)
NCUA is proposing to add a definition of “overall financial performance” to section 701.21(c)(8) to clarify requirements related to federally insured credit unions’ (FICUs) compensation plans that include incentives or bonuses related to lending metrics as part of the FICU’s overall financial performance. This proposal would also add the phrase “including a senior management employee” to the exception on payments of an incentive or bonus to an employee based on overall financial performance. America’s Credit Unions previously supported such changes in the 2019 ANPR.
Eligible Obligations: 12 CFR 701.23
NCUA is proposing to revise section 701.23, which governs the purchase, sale and pledge of eligible obligations. The revisions include removing the prescriptive lists of items that must be addressed in the written policies which would allow the credit union board of directors’ the authority to establish the limitations of their written policies. Additionally, this proposal would remove paragraph (g) under section 701.23, which addresses conflicts of interest and compensation as the NCUA has said it is duplicative and already governed by broader conflict of interest provisions in their bylaws and by the fiduciary duties of their officials.
Refund of Interest (Loans): 12 CFR 701.24
NCUA is proposing to remove section 701.24 , which addresses refunds of interest to members because it is duplicative of the Federal Credit Union (FCU) Act. As such, federal credit unions would only need to reference the FCU Act (12 U.S.C. 1761b(9)) to confirm requirements for refunds of interest to members.
Credit Union Service Contracts: 12 CFR 701.26
NCUA is proposing to remove section 701.26 , which authorizes FCUs to enter into contractual agreements, but requires agreements be in writing.
Definitions related to Statutory Lien: 12 CFR 701.39(a)(1)
NCUA is proposing to eliminate the definition of “except as otherwise provided by law or except as otherwise provided by federal law” from NCUA regulation section 701.39 , which addresses statutory liens.
Seventh Round
Records Preservation Program and Appendices – Record Retention Guidelines; Catastrophic Act Preparedness Guidelines: 12 CFR 749
NCUA is proposing to remove Appendix A to Part 749 which discusses record retention guidelines and Appendix B , which discusses Catastrophic Act Preparedness Guidelines. This is intended to give credit union boards of directors more flexibility to determine their own process. Additionally, this proposal would also add definitions of vital member services and vital records as well as add the term vital to the heading of 12 CFR 749 and section 749.0 to further clarify the scope of Part 749. Furthermore, the NCUA is proposing to make clear that a records preservation log may be in electronic format and that destruction of older versions of records is permissible unless required by other law or regulation. Lastly, this proposal would state clearly the NCUA’s expectation that, if a credit union contracts with a third-party service provider to maintain its vital records, the credit union must maintain effective oversight of the third-party service provider to ensure the credit union meets its obligations under Part 749.
For more information on the various NCUA deregulatory proposals, members can review summaries in our regulatory comments here . We would also appreciate any feedback you have on a particular deregulatory proposal; you can find information on submitting feedback in the relevant regulatory comment. America’s Credit Unions will continue to monitor these proposed rules and any further proposals from NCUA. For any questions, please don’t hesitate to email [email protected] .
