Message from the Chairman
On behalf of the National Credit Union Administration, I am pleased to present our 2024 Annual Report.
As required by the Federal Credit Union Act, this report reviews the agency’s performance in 2024 and includes the audited financial statements for the NCUA’s four funds:
- The National Credit Union Share Insurance Fund
- The NCUA Operating Fund
- The Central Liquidity Facility
- The Community Development Revolving Loan Fund1
Each of these funds received an unmodified, or “clean,” audit opinion and reported no material weaknesses. The financial and performance data contained in this report are reliable, complete, and consistent with applicable Office of Management and Budget (OMB) circulars.2
The NCUA’s mission is to protect the system of cooperative credit and its member-owners through effective chartering, supervision, regulation, and insurance. This, in turn, promotes confidence in the nation’s credit union system. Further, the agency insures members’ share deposits at federally insured credit unions and safeguards the National Credit Union Share Insurance Fund.
Overall, the credit union system remained strong in 2024, although the NCUA continues to monitor warning signs of potential weaknesses. Namely, the agency saw signs of weak loan performance and lower earnings across the system and at specific institutions.
Despite ongoing economic uncertainty, the Share Insurance Fund and the credit union system remained well-capitalized with sufficient liquidity during the year. The agency’s more notable accomplishments for 2024 are summarized below along with the NCUA’s priorities in 2025.
Safeguarding the System and Reducing Regulatory Burdens
The NCUA Board is responsible for maintaining a healthy Share Insurance Fund and enabling credit unions to compete with other financial institutions while complying with applicable laws and regulations.
In July 2024, the Board approved maintaining the current 18-percent interest rate ceiling for loans made by federal credit unions for a new 18-month period from September 11, 2024, through March 10, 2026.
Looking ahead, the NCUA will work to reduce, streamline, or eliminate outdated or overly burdensome regulations where possible, so credit unions can stay competitive in the changing environment and provide affordable financial services to their members and communities.
Revamping the De Novo Chartering Process
Improving the new credit union chartering process is an agency priority. For over 90 years, forming a credit union in the United States has been the answer for hundreds of thousands of immigrants, religious groups, factory workers, and others. Access to financial services and credit can improve the economic trajectory of a family or community for generations.
To streamline the charter application process and make it more efficient, the NCUA began tracking the time from application and formal identification of a field of membership to the successful completion of the application. This information can help organizing groups plan while helping the NCUA identify areas of the process that need additional attention.
The NCUA granted four new federal charters in 2024. Updates to the Consumer Access Process and Reporting Information System (CAPRIS) and the Chartering and Field of Membership Manual have also provided greater clarity on the chartering and field-of-membership expansion processes to organizing groups. The NCUA will continue to focus on de novos by further improving the charter application process. We will measure our success through the creation of new, stable charters.
Fostering Financial Innovation
The NCUA is working to support credit unions use of advanced technologies, such as artificial intelligence (AI), cloud applications, distributed ledger technology, blockchain, and digital identification.
The ability to automate payments 24/7 democratizes the financial system. Digital ID technologies could permeate credit union “know-your-customer” processes and help credit unions mitigate fraud and risk. As a result, credit union members will benefit from cheaper, faster payments. Credit unions are already growing in this space, and some have identified partners to help them improve their operations and finances.
The NCUA’s financial technology team is hard at work identifying and addressing barriers, challenges, and opportunities for the credit union industry to use technology in a productive and safe and sound manner. Also, the NCUA is exploring ways to leverage AI technology to increase workplace efficiencies.
Addressing the Growing Cybersecurity Threat
Securing cyberspace is a constant challenge and the significance of cybersecurity cannot be overstated, especially given the amount of highly sensitive information entrusted to credit unions by their members. The level of cybersecurity preparedness among credit unions is growing. However, credit unions must continually evolve their cybersecurity defenses; and Boards, management, and staff must remain on guard against bad actors.
The NCUA’s Information Security Examination (ISE) program is providing the agency with a clearer picture of the state of credit union cybersecurity readiness, and the agency’s Automated Cybersecurity Evaluation Toolbox (ACET) is a useful resource to help credit unions assess their level of cybersecurity preparedness.
Setting New Priorities
Priorities during my term as Chairman include:
- Streamlining the NCUA’s budget
- Enhancing the clarity and efficiency of the examination program
- Developing and implementing a regulatory scheme that is easy to navigate for current and future credit unions
The NCUA Board has an obligation to responsibly steward the funds entrusted to the NCUA by the credit unions and should always consider the compliance burdens and costs credit unions shoulder daily. The budget will focus on improving the NCUA’s budgeting process to ensure restraint. Such restraint is done as a normal practice by the entities NCUA regulates. We owe it to our nation’s credit unions and their members to align NCUA’s priorities with the difficult decisions they make every day.
A clear and efficient examination program in which all parties understand the conclusions and findings is paramount to a productive and professional relationship between the NCUA and regulated entities. The NCUA’s commitment to this goal is reflected in our efforts to encourage credit unions to record exit meetings with examiners, and to collect feedback about the examination process through a post-examination survey. These surveys have yielded several great suggestions and reinforced the NCUA’s commitment to process improvement and clarity.
Reevaluating our rules, modifying them as appropriate, and easing regulatory burdens where possible will be a focus area for the NCUA. Regulations must be sensible, easy to navigate, and allow groups to form new credit unions and credit unions to serve their members.
In closing, I want to extend my appreciation to Todd Harper for his past leadership as NCUA Chairman. Additionally, the agency’s many accomplishments over the year were due to the dedication and professionalism of our employees and the services they provide to the public. I am honored to lead this agency.
Looking ahead, the NCUA will continue to work with stakeholders to enhance the credit union system through innovation, transparency, and a regulatory structure that allows credit unions to meet the evolving financial needs of families and businesses across America.
Kyle S. Hauptman
Chairman
National Credit Union Administration
1775 Duke Street | Alexandria, VA 22314