Advocacy Effectiveness Reflected in NCUA BOD Actions

The positive impact of advocacy was apparent during this week’s National Credit Union Administration Board of Directors meeting. Advocacy efforts led to substantial improvements in both the final rule on succession planning and the biennial budget for fiscal years 2025 and 2026.

  1. Final Rule on Succession Planning – The NCUA Board unanimously adopted a final rule on succession planning, effective January 1, 2026, incorporating several key changes advocated by GoWest:
  • Biennial Review Requirement: The succession plan review frequency has been extended from annually to every two years from the proposed rule to the final rule.
  • Narrowed Scope of Covered Positions: The rule’s applicability has been narrowed by removing loan officers, supervisory committee members, and credit committee members from the list of covered management officials.
  • Flexibility in Plan Content: The final rule does not mandate coverage of unexpected or temporary vacancies, nor does it specify required content for a federally insured credit union’s recruitment strategy. Additionally, there is no longer a requirement to document deviations from approved succession plans in meeting minutes.
  • Support Resources: The NCUA has committed to providing a Board resource template and conducting outreach to assist credit unions in implementing these plans.

These modifications align with recommendations from GoWest and other commenters, reflecting a responsive approach by the NCUA to industry concerns. While GoWest was generally opposed to the proposed succession planning rule and still questions the NCUA’s legal authority to apply the rule to state charters, we were pleased that the final rule included changes that we recommended.

Succession Planning Final Rule

Succession Planning Template

Link to GoWest Succession Planning Letter

  1. Approval of the 2025–2026 NCUA Budget – Significant revisions to the proposed biennial budget were made, aligning with the feedback provided by GoWest and other industry representatives that provided budget testimony:
  • Reduced Budget Increase: The initially proposed 12.2% budget increase for 2025 has been scaled back to a 2.5% increase, demonstrating fiscal restraint in response to our advocacy.
  • Elimination of Proposed Positions: The Board removed several new administrative positions, including those for the Office of the Executive Secretary, Office of the Ombudsman, Office of Continuity and Security Management, Office of Human Resources, and Office of External Affairs. This action addresses our concerns regarding disproportionate growth in the administrative budget compared to the Examination and Supervision Budget.
  • Operational Savings: Additional reductions include a $3.5 million cut in the travel budget and a $1.2 million cut in contracted services, contributing to total savings of $86.7 million over the biennium.

These budgetary revisions are expected to result in a slight decrease in the operating fee paid by credit unions in 2025 compared to 2024. Had the budget been adopted as proposed, the operating fee would have increased by more than 9%. These are savings that will ultimately benefit credit unions and their members.

One highlight adopted in the budget was the extended examination cycles for larger CAMEL 1 and 2 rated credit unions, that contributes to operational efficiencies and cost savings for both the NCUA and credit unions.

Final NCUA 2025/2026 Budget

Link to Budget Hearing

Link to GoWest Written Budget Testimony

To close the meeting, all three board members acknowledged Deputy Executive Director Rendell Jones for his contributions to the agency. Rendell has taken a CFO position at the Federal Reserve

These outcomes underscore the effectiveness of GoWest’s advocacy efforts and our commitment to representing the interests of member credit unions.

 

Posted in Advocacy on the Move, Regulatory Advocacy.