Off the Record, On the Issues with John

​NCUA has released new deregulation proposals aimed at streamlining outdated rules while maintaining safety and soundness.

By John Alexander, DakCU Director of Legislative & Regulatory Affairs
​
NCUA’s New Deregulation Proposals: What They Mean for Credit Unions
The National Credit Union Administration (NCUA) announced a fourth round of proposed rule changes under its Deregulation Project. In plain terms, NCUA is reviewing its rules and trying to remove requirements that are outdated, repetitive, or more burdensome than they need to be, while still protecting safety and soundness.

NCUA is asking for public comments on four proposals. The related notices were published in the Federal Register on Wednesday January 28, 2026.

What is being proposed
1) Public unit and nonmember shares: remove the “written plan” trigger
Current rule: If a federal credit union is taking in a large amount of public unit or nonmember shares, and those funds plus borrowings go over a set threshold, the board must adopt a specific written plan for how those funds will be used.

What NCUA wants to change: Remove that specific written-plan requirement from the regulation. NCUA’s view is that boards can manage this risk using their own policies, while still staying within existing limits.

Less “paperwork-by-rule” for boards when funding levels cross that threshold, without removing the expectation that boards manage funding and liquidity risk responsibly.

2) Termination of excess insurance coverage: remove the fixed 30-day notice rule
Current rule: If a credit union ends supplemental share insurance (insurance beyond NCUSIF coverage), it must notify members in writing at least 30 days before the termination date.

What NCUA wants to change: Remove the regulation that forces a specific 30-day timeline. Credit unions would still need to notify members when supplemental coverage is terminated, but the rigid timing requirement would be eliminated.

If a credit union ever drops extra insurance coverage, the rulebook would be less prescriptive about exactly when the notice must go out.

3) Maximum borrowing authority: remove the NCUA borrowing limit for FISCUs
Current rule: NCUA’s insurance rules include a borrowing cap tied to “paid-in and unimpaired capital and surplus.”

What NCUA wants to change: Remove that borrowing limit from the insurance regulations. According to NCUA, this would mainly affect federally insured state-chartered credit unions (FISCUs), which would then follow any applicable state-law borrowing limits instead. NCUA notes the statutory borrowing limit for federal credit unions would still apply.

For state-chartered, federally insured credit unions, the key borrowing limit would be driven more by state law than by this specific NCUA insurance rule.

4) Disclosure of share insurance for nonmember shares: remove a duplicative rule
Current rule: For certain state-chartered credit unions that accept nonmember shares or deposits (when allowed by state law), the rule requires identifying those accounts on required reports and sending written notice that those accounts are not NCUSIF-insured.

What NCUA wants to change: Eliminate this section because NCUA believes the disclosure is already covered through other required agreements and disclosures tied to maintaining federal insurance.
​
NCUA is trying to remove a “double tap” requirement where credit unions may already be providing the same disclosure through other required processes.

Why this matters
This set of proposals is not about loosening core safety expectations. It is about reducing rules that are either (1) outdated, (2) duplicative, or (3) overly prescriptive in how a credit union must document something that is already managed through existing governance and examiner expectations.

What happens next
These are proposals, not final rules. NCUA has opened a comment process, and the Federal Register notices will control the exact details, including how to submit comments and the comment deadlines.

Stay Connected
For more information or to share your perspectives, feel free to contact me.  ​