NCUA Releases Sixth Set of Proposed Rule Changes under Deregulation Project

Posted by Erin Hall on February 24, 2026

The National Credit Union Administration today announced the sixth round of proposed regulatory changes associated with NCUA’s Deregulation Project, aimed at reducing duplicative requirements and increasing operational flexibility while maintaining safety and soundness.

This round of proposals will be open for public comment for 60 days following publication published in the Federal Register.

The six proposals include:

Post‑Election Training for New Board Members — 12 CFR 701.4(b)(3)

Proposed Change: Eliminates the requirement that new directors possess or obtain finance and accounting expertise within six months of appointment.
Impact: Reduces compliance burden for volunteer boards.

Loan Compensation/Commission — 12 CFR 701.21(c)(8)

Proposed Change: Adds a definition of “overall financial performance” and clarify that the exception for incentive or bonus payments based on overall financial performance applies to all employees, including senior management.
Impact: Provides clearer regulatory expectations and reduces compliance complexity, supporting recruitment and retention efforts.

Eligible Obligations — 12 CFR 701.23

Proposed Change 1: Requires eligible obligations and notes from liquidating credit unions to comply with the purchasing FCU’s internal written policies.
Impact: Removes unnecessary prescriptive requirements while preserving appropriate policy standards.

Proposed Change 2: Allows boards to define limitations within their own written sale policies for eligible obligations.
Impact: Reduces administrative burden and increases flexibility to tailor policies to operational needs and risk profiles.

Proposed Change 3: Removes §701.23(g) regarding payments and compensation, as these matters are already addressed through existing conflict‑of‑interest rules and fiduciary duties.
Impact: Eliminates duplicative requirements and provides boards more flexibility in developing risk‑based policies and compensation frameworks.

Refund of Interest (Loans) — 12 CFR 701.24

Proposed Change: Removes §701.24 because it duplicates provisions in the Federal Credit Union Act.
Impact: Streamlines compliance by consolidating requirements in a single statutory reference.

Credit Union Service Contracts — 12 CFR 701.26

Proposed Change: Removes §701.26, which authorizes FCUs to enter into contracts and requires agreements to be in writing.
Impact: Simplifies regulatory requirements by eliminating unnecessary provisions.

Statutory Lien Definitions — 12 CFR 701.39(a)(1)

Proposed Change: Deletes the definition of “except as otherwise provided by law or federal law.”
Impact: Removes unnecessary text and improves clarity while reducing compliance burden.

Across Rounds 1 through 5, the proposals offering the most meaningful regulatory relief include the removal of segregated‑collateral requirements for suretyship and guarantees, simplified rules for lending to other credit unions, expanded flexibility in catastrophic‑act reporting, and the elimination of unnecessary written plans and duplicative disclosures. The modernization of Supervisory Committee audit and verification requirements is also expected to reduce burden. These changes primarily assist small and mid‑sized credit unions, with targeted benefits for FISCUs and corporate credit unions.

Other elements of the initiative focus on administrative cleanup, such as rescinding outdated IRPS documents, relocating cybersecurity and incident‑response appendices out of regulatory text, and repealing duplicative nondiscrimination‑summary rules. While these revisions improve clarity and organization, they carry limited operational impact.

Comment periods for Rounds 1 and 2 have closed or are nearing completion, while Rounds 3 through 5 remain open through March and April. No final rules have been issued, and the initiative continues to be proposal‑oriented.

Background: NCUA Deregulation Project

In 2025, the National Credit Union Administration (NCUA) launched the Deregulation Project, a broad effort to review and revise its regulations. The initial focus is on removing or updating rules that are outdated, duplicative of statute, intended as guidance rather than requirements, or unnecessarily burdensome.

Overall, the Deregulation Project signals a move toward less prescriptive, more flexible rulemaking. If finalized, these changes will offer meaningful regulatory relief for all credit unions by eliminating exam expectations that do not contribute to safety and soundness.

How We Are Engaging

GoWest is prioritizing advocacy that makes the NCUA’s regulatory framework more transparent, predictable, and aligned with statute. These initial deregulatory steps show progress, and we will continue building on them in 2026.

Find more information and details on the proposed deregulations here.

Posted in Advocacy on the Move, Regulatory Advocacy.