NEWS: Yesterday, The League submitted four comment letters to the NCUA, telling them that we back each of the proposed regulatory changes in Round 4 of their Deregulation Project:
- We told the NCUA that we support its proposal to remove §741.2 from its regulations. That provision sets a maximum borrowing limit as part of the requirements for obtaining and maintaining federal share insurance with the National Credit Union Share Insurance Fund.
The letter quoted one of our credit unions, which wrote: “Removing the federal borrowing limit eliminates a redundant layer of regulation and ensures that state-chartered credit unions operate under a unified, state-specific set of requirements. This change enhances regulatory consistency, reduces compliance complexity, and allows for institutions (like ours) to manage liquidity and funding strategies with greater flexibility.”
- We submitted a letter in support of the NCUA proposal to remove paragraph (b)(2) from §701.32 of its regulations. That provision requires a credit union board to develop a written plan on the intended use of public unit and nonmember shares if those funds, along with any borrowings, would exceed 70% of paid-in unimpaired capital and surplus. Federally insured credit unions (FICUs) would remain subject to aggregate limits found in paragraph (b)(1) of the rule, restricting total public unit and nonmember deposits to 50% of the net amount of paid-in and unimpaired capital and surplus.
We told the NCUA: “Wisconsin’s credit unions agree that paragraph (b)(2) is unnecessarily prescriptive and overly burdensome. The change would give [FICU] boards the option of developing their own policies for managing public unit and nonmember shares within existing aggregate limits, letting the boards manage their funding sources and reliance on these funds with greater flexibility. The change reflects a shift toward allowing credit unions to establish risk-management strategies, rather than relying on specific regulatory requirements.”
- We voiced support for the NCUA proposal to eliminate §741.10 of its regulations. That provision requires federally insured state-chartered credit unions (FISCUs) that are permitted by state law to accept nonmember shares or deposits to: 1) identify such accounts on all required regulatory reports and 2) notify all nonmember account holders in writing that the National Credit Union Share Insurance Fund does not insure their accounts. The NCUA is proposing to remove this section because it duplicates the disclosures FISCUs are already required to make as part of their agreement for maintaining federal share insurance.
- We wrote a letter in support of the NCUA proposal to eliminate §741.5 of its regulations. That provision requires a [FICU] with share insurance coverage that supplements the coverage provided by the National Credit Union Share Insurance Fund to give its members 30 days’ notice if it plans to end its supplemental coverage. The NCUA would still require member notification, but without the specific 30-day timeframe.
Help us comment on Round 5
The deadline for commenting on the next round of the Deregulation Project is coming up. For details on the four proposals in this upcoming round, please see this League Comment Call.
Please email Paul Guttormsson with your thoughts on Round 4 by April 6, 2026, so that our comment letter (which is due April 13, 2026) can reflect your positions.
Compliance Roundtable – April 1 (Webinar)
Join a member of The League’s compliance team as they lead a discussion on the latest changes in regulations and need to know information to keep your credit union in compliance. You can find more information or register on our website.