NCUA Board Meets; Go West Hike the Hill Delegation Attends

Posted by Gracie Nelson on May 22, 2025

Today’s meeting of the NCUA Board was the first meeting with Hauptman as solo board member. The meeting provided several important updates including the agency’s major organizational transformation through the Voluntary Separation Program (VSP), the financial performance of the Share Insurance Fund (SIF) during the first quarter of 2025, the health and risk profile of federally insured credit unions, and the rollout of a new tool, an SIF dashboard, to enhance transparency and stakeholder engagement.

GoWest Credit Union advocates who were in Washington for the Spring Hike the Hill attended the meeting and connected with NCUA Board Chair Kyle Hauptman along with several of the agency’s staff members, reaffirming our ongoing commitment to collaboration and advocacy at the federal level on behalf of credit unions.

Organizational Transformation: Voluntary Separation Program (VSP) 

The NCUA is currently undergoing significant restructuring to align with the Administration’s call for large-scale federal workforce reductions. On March 21, 2025, the Board approved a Voluntary Separation Program (VSP) to achieve a 20% headcount reduction by year-end while minimizing operational disruption and ensuring continuity of mission. The NCUA shared that the program aims to support an orderly transition to a streamlined and more technology-enabled agency.

Two separation options were offered under VSP:

• NDRP (NCUA Deferred Resignation Program): Open to all employees, this option places participants on paid administrative leave through December 31, 2025.

• NVSIP (NCUA Voluntary Separation Incentive Payment): Offered to employees eligible for regular retirement, this option provides a $50,000 incentive payment upon departure.

The VSP saw strong uptake, with 243 to 257 employees expected to participate out of 297 eligible. As of the board meeting, 152 participants were already on paid administrative leave. The agency’s operational headcount is now 1,051, with an anticipated reduction to approximately 953 staff by the time all departures are finalized a 24.1% decrease from authorized January 2025 levels.

The NCUA highlighted that key adjustments have already been implemented amidst the reductions and include streamlined examination scheduling policies, more regional director flexibility, and use of artificial intelligence to drive operational efficiencies. Currently a hiring freeze is in place through at least July 15, 2025. Once lifted, the agency will adopt a 1:4 hiring ratio, filling only essential vacancies aligned with its future-state priorities.

NCUA Voluntary Separation Presentation

Share Insurance Fund Performance and Key Metrics 

The financial condition of the Share Insurance Fund remains sound, with modest gains in income and assets compared to the previous quarter. The Fund reported $79.8 million in net income for Q1 2025, a $1.2 million (1.5%) increase from Q4 2024.

Total assets rose to $23 billion, reflecting a $700 million increase primarily driven by $305.9 million in capitalization deposits receivable from credit unions through the annual true-up process, and a $296.1 million decrease in unrealized investment losses. Total reserves stood at $242 million, including $9 million in specific reserves and $233 million in general reserves.

The Equity Ratio remained below the Normal Operating Level, ending Q4 2024 at 1.30%—a two-basis-point increase from Q2 but still shy of 1.33%. The projected Equity Ratio for Q2 2025 is 1.26%, due to expected growth in insured shares. Nonetheless, as of March 31, the Fund could absorb losses up to $1.3 billion without falling below the statutory 1.20% minimum that would trigger a restoration plan. Total insured shares reached $1.778 trillion as of Q4 2024, a 1.1% increase from Q2.

There were no credit union failures requiring a payout from the Fund during the first quarter. The Fund maintained a sizable $5.6 billion in overnight investments and saw eight Treasury securities mature—totaling $650 million in face value—at yields ranging from 0.29% to 2.08%. Proceeds were reinvested at higher yields, helping offset a minor decline in overall interest rates.

Share Insurance Fund Presentation

New Transparency Tools: SIF Financial Dashboard 

In response to frequent questions from NCUA leadership and stakeholders, the agency unveiled a new Share Insurance Fund Financial Dashboard. Though the dashboard is not yet interactive, slides are available and provide a modernized, visual view of the Fund’s performance across several dimensions. Key features include:

• Revenue & Expenses Tab – Trend lines and bar charts correlate with income and cost data.

• Reserves Tab – Illustrates both general and specific reserves, including losses due to failures.

• Equity Ratio Tab – Tracks insured shares and trends over a five-year period.

• Investment Portfolio Tab – Includes data on maturing balances, unrealized gains/losses, and yield comparisons.

• CAMELS Overview Tab – Displays a six-year trend line of CAMELS ratings and insured share concentrations.

The dashboard is intended to move stakeholders beyond static reporting and toward real-time, visual understanding of the Fund’s performance. The Interactive tool will become available soon.

CAMELS Ratings and Risk Profile 

The NCUA reported stable risk exposure across the credit union system, with incremental improvements in several CAMELS categories.

The number of federally insured credit unions dropped slightly to 4,415—a decline of 52 institutions since Q4 2024. However, the percentage of insured shares held by CAMELS code 1 and 2 institutions rose from 90.2% to 90.8%. CAMELS code 3 institutions decreased from 715 to 679, with assets in this category shrinking $16.1 billion and totaling $172.6 billion. CAMELS 4 and 5 institutions decreased from 135 to 129; however, assets held in this risk category increased by $1.8 billion totaling to $20.3 billion. Overall, the Share Insurance Fund is well-positioned to manage risk and remains in strong financial condition.

Looking Ahead 

As the NCUA moves forward, the agency is focused on concluding the Voluntary Separation Program and maintaining its core mission through an orderly transition. With a significant portion of the workforce already participating in the VSP, leadership is now turning its attention to defining and implementing the future state of the agency. This includes streamlining internal processes, eliminating unnecessary tasks or functions, and incorporating stakeholder feedback. These efforts will inform the development of the agency’s draft 2026–2027 budget.

Additionally, there is a clear intention to reinvest savings from the reduction into the credit union system—both by identifying areas where unnecessary burden can be reduced and by exploring opportunities to deploy new technologies that fill staffing and operational gaps. Credit unions are encouraged to provide comments on the NCUA website, to share their input on regulations or procedures that are overly burdensome and offer suggestions for improvement. In parallel, the agency plans to revise its 2022–2026 Strategic Plan later this year to align with the evolving priorities of both the organization and credit union system.

Contact NCUA

The meeting concluded with NCUA Board Chair Hauptman expressing confidence in his ability to lead with stability and foresight. Hauptman reassured stakeholders that the agency is well-positioned to manage this moment of change and is committed to investing back into the credit union community while sustaining a strong and responsive regulatory framework.

The next meeting of the NCUA Board is tentatively scheduled for June 17, 2025.

Posted in Advocacy on the Move, Regulatory Advocacy.