NCUA Regulatory Updates

Key dates

2020-04-27

NCUA published the interim final rule establishing the PPP risk-weighting, PPP Loan Facility total-asset exclusion, and commercial-loan treatment.

2022-01-01

NCUA’s 2015 risk-based capital final rule became effective; the December 2021 final rule had already carried forward the relevant PPP treatment into the then-current capital adequacy framework.

2026-11-04

The final rule adopting the April 27, 2020 IFR without change becomes effective and is published at 91 FR 69493.

Suggested considerations

• Compliance teams may wish to confirm that risk-based capital reporting continues to assign a 0 percent risk weight only to loans meeting the applicable SBA PPP eligibility and coverage criteria.
• Credit unions that pledged PPP loans to the Federal Reserve PPP Loan Facility may wish to verify that the loans remain appropriately identified and excluded from total assets solely for the net worth ratio calculation under 12 CFR 702.2.
• Regulatory reporting and finance teams may wish to reconcile PPP-loan classifications across the general ledger, capital calculations, Call Report processes, and supporting documentation.
• Lending compliance teams may wish to confirm that qualifying PPP loans are not included as commercial loans for purposes of 12 CFR part 723, while other applicable lending, documentation, servicing, SBA-guarantee, and record-retention requirements remain separately addressed.
• Credit unions may wish to retain evidence supporting SBA guarantees, facility pledges, non-recourse funding, and the basis for any regulatory capital exclusions, particularly where legacy PPP balances remain on the balance sheet.
• Policy owners may wish to update regulatory inventories to identify the 2026 rule as a finalization of the 2020 IFR rather than as a new operational requirement.

What changed

Under 12 CFR part 702, covered loans issued under the SBA Paycheck Protection Program continue to receive a 0 percent risk weight for risk-based capital purposes. PPP loans pledged as collateral for a non-recourse borrowing through the Federal Reserve’s PPP Loan Facility continue to be excluded from total assets when calculating the net worth ratio under 12 CFR 702.2. Under 12 CFR part 723, PPP loans remain excluded from the definition of commercial loans.

Key dates

2026-10-15

The proposed rule is published in the Federal Register.

2026-12-14 Deadline

Public comments on the proposed amendments to 12 CFR parts 704 and 713 are due.

Suggested considerations

• Compliance teams may wish to review the proposal against existing policies and procedures under 12 CFR 704.18, 12 CFR 713, and 12 CFR 741.201, distinguishing provisions that would be removed from obligations that would remain.
• Credit unions should continue to maintain existing fidelity-bond coverage, deductibles, renewal processes, and NCUA-related approvals unless and until a final rule becomes effective.
• Boards and management may wish to assess whether current coverage remains adequate for fraud, dishonesty, theft, burglary, robbery, and other covered losses, and preserve documentation supporting the required board review.
• Credit unions and insurers may wish to evaluate whether the proposed flexibility in coverage amounts and deductibles affects policy terms, underwriting, renewal timing, or internal risk assessments.
• Interested parties may wish to submit comments by December 14, 2026, addressing the proposed treatment of coverage calculations, deductibles, bond forms, purchase and renewal procedures, and any transition or implementation concerns.

What changed

The proposal would amend 12 CFR part 713 and related corporate-credit-union requirements in 12 CFR 704.18 by eliminating or modifying prescriptive procedural requirements concerning fidelity-bond purchases and renewals, simplifying the rules governing coverage amounts and deductibles, and removing outdated requirements. The proposal would preserve the requirement that a federally insured credit union maintain adequate fidelity-bond coverage against losses involving fraud, dishonesty, theft, and other covered risks.

Key dates

2025-12-29

NCUA published the proposed rule to remove 12 CFR 701.25(b)

2026-02-27 Deadline

Public comment period closed

2026-08-06

Final rule published in the Federal Register at 91 FR 50664

2026-09-08 Deadline

Final rule becomes effective and 12 CFR 701.25(b) is removed

Suggested considerations

• Compliance teams may wish to confirm that internal lending policies still reflect the remaining limits in 12 CFR 701.25(a) and any other applicable provisions, even though the separate policy requirement in paragraph (b) has been removed.
• Boards may wish to review whether any internal approval process for loans to other credit unions remains desirable as a governance control, particularly where state law, bylaws, or enterprise risk practices still support formal approval.
• State-chartered credit unions may wish to verify whether state law or state supervisory expectations still require board approval or written policies for loans to other credit unions.
• Monitoring teams may wish to update regulatory inventories, policy cross-references, and exam prep materials to reflect that 12 CFR 701.25(b) is no longer codified effective 2026-09-08.
• Training and procedure documents may wish to distinguish between the removed board-policy requirement and the continuing statutory and regulatory loan limits that still apply.

What changed

The final rule removes the documentation requirement in 12 CFR 701.25(b) that required board approval of all loans to other credit unions and written policies governing those loans. NCUA states that federal credit unions remain subject to statutory requirements on loans to credit unions, and the remaining limits and requirements in § 701.25 continue to apply. The rule does not change the aggregate loan limit in § 701.25(a), which remains 25% of the lending federal credit union’s paid-in and unimpaired capital and surplus.

Key dates

2026-02-25

NCUA published the proposed rule for public comment.

2026-04-27

Public comment period closed after NCUA received 15 comments.

2026-08-06

NCUA published the final rule in the Federal Register at 91 FR 50680.

2026-09-08 Deadline

Final rule becomes effective.

Suggested considerations

• Compliance teams may wish to review and update FCU written policies for purchases, sales, and pledges of eligible obligations so they no longer mirror the removed prescriptive checklist and instead reflect the board’s own risk-based framework.
• Credit unions may wish to confirm that internal governance documents still address conflicts of interest and compensation consistently with bylaws and fiduciary-duty expectations, even though the detailed regulatory text has been removed.
• Firms should consider updating any procedures, training materials, and control inventories that reference the old paragraph structure or the former 12 CFR 701.23(h) cross-reference.
• Compliance teams may wish to validate that transaction approval, due diligence, documentation, and agreement-review processes continue to be embedded in policy at a level appropriate to the institution’s risk profile, even though the rule is less prescriptive.
• Federal credit unions may wish to brief boards and relevant committees on the shift from a checklist-based rule to a principles-based framework so governance oversight remains aligned with supervisory expectations.

What changed

['The rule removes the mandated lists of items that FCU written policies must address for purchases, sales, and pledges of eligible obligations under 12 CFR 701.23(b)(6), (c), and (d). FCUs still must maintain written policies for these activities, but the regulation no longer prescribes a detailed checklist of required policy contents.', 'The rule removes the detailed conflicts-of-interest and compensation provision formerly in 12 CFR 701.23(g).

Key dates

2026-03-25

NCUA issued the proposed rule to remove the prescriptive requirements

2026-05-26 Deadline

Public comment period closed

2026-08-06

Final rule was published in the Federal Register at 91 FR 50677

2026-09-08 Deadline

Final rule becomes effective

Suggested considerations

• Compliance teams may wish to review current indirect vehicle lending policies to confirm they no longer reference the removed 50% and 100% net-worth limits.
• Boards may wish to document a board-approved risk appetite and concentration framework for third-party serviced indirect vehicle loans.
• Credit unions may wish to align vendor oversight, due diligence, and servicing controls with their internal policies since the prior waiver pathway is no longer the operative framework.
• State-chartered federally insured credit unions may wish to verify any conforming updates needed to insurance-related procedures and governance materials.
• Compliance functions may wish to update training, policy manuals, and examination binders to reflect that supervision will now focus on principles-based oversight rather than the deleted rule text.

What changed

The final rule removes 12 CFR 701.21(h) in full, eliminating the existing concentration limits, the 30-month step-up to a higher limit, the waiver process to a Regional Director, the related response timeline, and the embedded definition framework tied to that paragraph. NCUA also states that it removed the parallel requirement in 12 CFR 741.203(c) and the related citation in 12 CFR 746.201(c), as part of the same deregulatory package.

Key dates

2026-08-06

Federal Register publication of the final rule at 91 FR 50661

2026-09-08 Deadline

Final rule becomes effective

Suggested considerations

• Compliance teams may wish to update policies, procedures, and product templates that still reference the former segregated deposit and collateral formulas in 12 CFR 701.20.
• Institutions may wish to review surety and guaranty programs to ensure the obligation remains fixed in amount and duration and is structured as an otherwise permissible loan under the applicable lending regulations.
• FCUs may wish to confirm that any related lending analysis still addresses member lending limits and other applicable provisions, including where commercial lending rules apply.
• FISCUs may wish to confirm continued state-law authority to act as surety or guarantor and verify any state-specific constraints or approvals before offering these arrangements.
• Risk and compliance functions may wish to reassess collateral practices for these products in light of the new flexibility while preserving safety-and-soundness controls.

What changed

The final rule deletes the specific segregated deposit requirement in 12 CFR 701.20(c)(3) for suretyship and guaranty agreements. It also removes the detailed collateral standards in 12 CFR 701.20(d), including the prior 100 percent and 110 percent collateral categories and the requirement for a perfected security interest tied to those prescribed values.

Key dates

2026-02-25

NCUA issued the proposed rule removing 12 CFR 701.26; public comments were invited through April 27, 2026

2026-04-27 Deadline

Public comment deadline on the proposal

2026-08-06

Final rule published in the Federal Register at 91 FR 50674

2026-09-08 Deadline

Final rule becomes effective

Suggested considerations

• Compliance teams may wish to remove references to 12 CFR 701.26 from policies, procedures, and training materials once the rule is effective.
• Firms should consider confirming that contract templates still include written terms addressing audit rights, information security, business continuity, indemnification, performance metrics, data ownership and return, termination, and dispute resolution.
• Credit unions involved in shared operational arrangements may wish to review whether documentation now reflects the updated clarification in 12 CFR 721.3.
• Firms may wish to confirm that third-party risk management, vendor oversight, and due diligence controls remain aligned with existing supervisory expectations despite the regulatory deletion.

What changed

The final rule rescinds 12 CFR 701.26, which had addressed FCU authority to enter written contracts for assets or services relating to daily operations and required those agreements to be in writing. NCUA states that the contractual authority already exists under the FCU Act and incidental powers authority, so the regulation was redundant. The Board also amended 12 CFR 721.3 to formally clarify that credit unions may act as representatives in shared operational arrangements with other credit unions or organizations, and that fixed assets may be shared.