Deregulation Project

Summary:

The NCUA Board (Board) is proposing to amend its regulations for corporate credit unions by removing the requirement that a corporate credit union’s asset and liability management committee (ALCO) must have at least one member who is also a member of the corporate credit union’s board of directors. The proposed rule would also remove filing and notification requirements related to a corporate credit union’s annual report and any management letter or other report issued by its independent public accountant. The intended effect is to reduce unnecessary regulatory burden and provide corporate credit unions with greater flexibility.

Link to full proposal: https://www.federalregister.gov/public-inspection/2025-22487/corporate-credit-unions

Simplified Summary: The NCUA Board proposes removing a requirement that a corporate credit union’s ALCO must have at least one member who is also a member of the corporate credit union’s board of directors. The proposed rule also removes filing and notification requirements related to a corporate credit union’s annual report and independent public accountant’s management letter or other report.

Proposed Changes in the Rule:

• Change 1: ALCO Committee Representation (12 CFR 704.8)
  • The Board now proposes to rescind the requirement for each corporate credit union’s ALCO to have at least one member who is also a member of the board of directors.
  • Impact on Credit Unions: Corporate credit union boards would have the ability to determine their ALCO membership. The change would also reduce burden on board members.
• Change 2: Filing requirements related to a corporate credit union’s annual report (12 CFR 704.15)
  • The Board proposes to:
    • Rescind the requirement to file a copy with NCUA of an annual report within 180 days after the end of the calendar year and any management letter or other report issued by its independent public accountant within 15 days after receipt by the corporate credit union.
    • Rescind the requirement for NCUA to make the annual report available for public inspection.
    • Rescind requirements related to untimely filings.
    • Remove the requirement to report on the engagement of an independent public accountant.
  • NCUA can access this information through other means. The proposed changes only remove the requirements for the corporate credit union to file the documents with NCUA but does not limit NCUA’s access to the information.
  • The change related to the independent public accountant engagement is intended to reduce burden. Corporate credit unions would still need to inform NCUA when its independent public accountant is dismissed or resigns.
  • Impact on Credit Unions: Eliminating these filing requirements will remove unnecessary and unduly burdensome requirements on corporate credit unions.

Summary:

The NCUA Board is proposing to amend its regulations governing supervisory committee audits to eliminate unnecessary, redundant, and overly prescriptive provisions. This action will reduce regulatory burden, increase operational flexibility for credit unions, and streamline the rules by removing requirements that are outdated or duplicative of other authorities. The intended effect of this proposal is to simplify compliance for credit unions without compromising the integrity of the audit process.

Link to full proposal: https://www.federalregister.gov/public-inspection/2025-22488/supervisory-committee-audits-and-verifications

Simplified Summary: The NCUA Board proposes to amend its regulations governing supervisory committee audits. The intended effect of this proposal is to simplify compliance for credit unions without compromising the integrity of the audit process.

Changes in the Rule:

• Change 1 – Updating definition of “Internal controls.”
  • The Board is proposing to amend 12 CFR 715.2(h), which defines “Internal control” for part 715. NCUA proposes to remove the elements of the definition that are overly prescriptive and risk becoming obsolete. This change would make the definition more durable and allow federally insured credit unions (FICUs) and auditors to apply current, industry-accepted frameworks for evaluating internal controls.
• Change 2 – Verification of member accounts
  • The Board is proposing to amend 12 CFR 715.8(a), which details specific methods for the verification of member accounts. The FCU Act, at 12 U.S.C. 1761d, requires the supervisory committee to verify member accounts at least once every two years. The regulation is overly prescriptive when it requires members’ accounts to be verified against the records of the treasurer of the credit union. The Board proposes to remove the words “of the treasurer” to state more generally that members’ accounts must be verified against the credit union’s records.
• Change 3 – Auditor engagement letter
  • The Board is proposing to amend 12 CFR 715.9(b), which requires the scope of work with an outside, compensated auditor to be documented in an engagement letter contracted with the supervisory committee. The Board proposes to remove the overly prescriptive requirement that the engagement letter must be signed by both parties.
• Change 4 – Copy of Audit Reports
  • The Board is proposing to amend 12 CFR 715.10(a) by removing the sentence that requires a supervisory committee to provide NCUA with a copy of audit reports upon request. This requirement is unnecessary as NCUA has the authority to access all federally insured credit union books and records during its examination and supervision activities.
• Change 5 – Objectives of a Financial Audit
  • The Board proposes to remove two sentences from 12 CFR 715.12(b) that describe the objective of a financial statement audit compelled by NCUA.
  • This language is unnecessary. The provision already requires an audit be performed in accordance with Generally Accepted Auditing Standards (GAAS), and GAAS already establishes the objectives of a financial statement audit.
  • The adverse opinion or disclaimer of opinion commentary in the regulation is best read as guidance and could cause confusion if auditing standards evolve to provide different objectives or expectations for financial statement audits.

Summary:

The NCUA Board (Board) is proposing to remove Appendix A to part 748, guidelines for safeguarding member information, from the Code of Federal Regulations (12 CFR Part 748 Appendix A). Appendix A was issued to satisfy NCUA’s statutory obligation to establish appropriate standards for federally insured credit unions (FICUs) to protect the security and confidentiality of customer records and information and to protect against unauthorized access to or use of such records. The Board now believes that the placement of Appendix A in the CFR may be confusing because Appendix A is not a regulation but rather a set of guidelines intended to assist FICUs with their statutory compliance obligations. The Board proposes to remove Appendix A from the CFR and publish its contents as a Letter to Credit Unions, which enables more efficient revisions, streamlines NCUA’s regulations, and ensures guidance is conveyed as guidance.

Link to full proposal: https://www.federalregister.gov/public-inspection/2025-22488/supervisory-committee-audits-and-verifications

Simplified Summary: The NCUA Board proposes removing guidelines for safeguarding member information from 12CFR 748, Appendix A because it may be confusing to have guidance presented through regulation. These guidelines are intended to assist FICUs with their statutory compliance obligations—they are not independently enforceable. The Board will remove Appendix A from the CFR and publish its contents online.

Change in the Rule:

• Change: Remove guidance from regulations
  • The Board intends to remove the content of Appendix A from the Code of Federal Regulations. The guidelines provided by Appendix A related to Safeguarding Member Information are guidance, and the content will be published online later should the rule be finalized. This option will be a better vehicle for conveying and updating this information and will help to streamline NCUA’s regulations.

Summary:

The NCUA Board (Board) is proposing to remove Appendix B to part 748, Guidance on Response Programs for Unauthorized Access to Member Information and Member Notice. Appendix B was issued in June 2005. Its purpose was to provide federally insured credit unions (FICUs) with guidance for creating programs to address and respond to instances of unauthorized access to member information. The Board now believes that the placement of Appendix B in the Code of Federal Regulations (CFR) may be confusing because Appendix B itself is guidance to assist FICUs in developing the response programs required pursuant to regulation. The Board instead would publish the content of Appendix B as guidance. This will be a better vehicle for conveying and updating this information and will help to streamline NCUA’s regulations.

Link to full proposal: https://www.federalregister.gov/public-inspection/2025-22490/guidance-response-programs-for-unauthorized-access-to-member-information-and-member-notice

Simplified Summary: The NCUA Board proposes 12 CFR 748 Appendix B be removed from the regulation and published as guidance to assist FICUs.

Change in the Rule:

• Change: Remove guidance from rule
  • The Board intends to publish the content of Appendix B as guidance. This will be a better vehicle for conveying and updating this information and will help to streamline NCUA’s regulations.