Off the Record, On the Issues with John

NCUA deregulation efforts and swipe fee litigation could have important implications for Dakota credit unions.

By John Alexander, DakCU Director of Legislative & Regulatory Affairs

NCUA Launches Deregulation Project
NCUA recently announced a new “Deregulation Project” aimed at reviewing its existing rules and removing provisions it considers outdated, duplicative, or better handled through guidance rather than regulation. The first package of proposals is narrowly targeted and does not represent a wholesale rewrite of NCUA’s regulations, but it offers an early look at the agency’s direction.
 
As part of this initial proposal, NCUA would remove Appendix B to Part 748 from the Code of Federal Regulations (CFR). Appendix B has historically served as guidance on response programs following unauthorized access to member information, including when member notification may be appropriate. Industry coverage also suggests that related guidance may be relocated outside the CFR and reissued through NCUA’s supervisory guidance channels.
 
For Dakota credit unions, particularly those operating with lean compliance teams this effort could reduce regulatory friction. Many of the appendices currently embedded in regulation date back to the early 2000s, an era when cybersecurity was largely addressed through paper policies rather than continuous operational controls. Streamlining these areas may allow credit unions greater flexibility to design security programs that reflect actual risk levels instead of outdated checklists.
 
That flexibility, however, comes with increased responsibility. With less prescriptive regulatory language, credit unions will need to rely more heavily on strong internal controls, thorough documentation, and active board oversight to demonstrate compliance during examinations. The challenge will be striking the right balance between flexibility and defensibility ensuring policies remain robust enough to satisfy examiners even as the formal rulebook becomes lighter.
 
December NCUA Board Meeting: What to Watch
At its December 18 meeting, the NCUA Board is scheduled to receive two key briefings: the quarterly Share Insurance Fund report and the agency’s proposed 2026–2027 budget. These briefings can shape supervision priorities going into 2026.
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The Share Insurance Fund briefing will offer signals on insured share growth, losses, and overall fund performance. The health of the Fund is critical to the stability and confidence of the credit union system. If the equity ratio were to fall too low, NCUA could consider premium assessments on insured institutions an outcome the industry hopes to avoid in 2026.
 
The budget briefing is equally important, as it outlines where NCUA plans to allocate resources over the next two years. Budget priorities can influence how many examiners are hired, how aggressive exam schedules may be, and which areas such as cybersecurity, consumer compliance, or fair lending receive heightened supervisory attention.
 
Retailers Challenge Proposed Swipe Fee Settlement
Meanwhile, long-running litigation over credit card interchange, commonly known as “swipe fees,” continues to pose potential risks for credit unions. Major retailers and merchant trade groups have asked a federal judge to reject a proposed settlement, arguing that it offers insufficient fee relief while leaving key network rules intact.
 
For credit unions, interchange revenue remains a vital funding source, particularly for institutions that rely on debit and credit card programs to support operations and reinvest in member services. When merchants push for lower interchange fees, those reductions rarely translate into savings for consumers. Instead, they typically reduce income for card issuers, including community-based credit unions.
 
If the courts side with the merchants, renewed pressure on Congress to impose routing mandates or fee caps is likely. This is familiar territory for the industry, and past experience shows that smaller issuers often bear the consequences, even when so-called “small issuer exemptions” exist in statute.
 
For Dakota credit unions, this issue is not abstract policy. Interchange revenue directly supports card programs, competitive rewards, and the ability to reinvest in local lending and member services. As the litigation unfolds, credit unions should be prepared for both legal and legislative ripple effects that could extend well beyond the courtroom.

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