DCUC Urges Regulatory Modernization and Greater Flexibility in NCUA Regulatory Review

WASHINGTON, DC – Today, the Defense Credit Union Council (DCUC) submitted official comments to the National Credit Union Administration (NCUA) as part of the agency's annual review of existing regulations, offering recommendations to modernize outdated requirements, improve operational flexibility, and strengthen credit unions' ability to serve members while maintaining safety and soundness. ​

In its letter, DCUC encouraged the NCUA to focus on three guiding principles throughout the review process:  

• Ensuring regulations are proportionate to a credit union's size, complexity, and risk profile 
  

• Periodically evaluating thresholds and requirements to reflect current economic and operational realities 
  

• Prioritizing principles-based regulatory provisions that allow institutions flexibility to comply in a manner consistent with their unique business models 
  

 
Among its recommendations, DCUC urged continued support for statutory enhancements to the Central Liquidity Facility (CLF), including greater flexibility for corporate credit unions serving as agent members. DCUC also recommended increasing the current $20,000 board-approval threshold for loans to officials under 12 CFR § 701.21(d) to at least $75,000 to better reflect modern lending practices. 
 
DCUC further called on the agency to clarify that director education, certification programs, and governance training qualify as reimbursable expenses under 12 CFR § 701.33 and reiterated its support for the NCUA's proposal allowing federal credit unions to reimburse reasonable dependent care costs incurred by volunteer officials. 
 
The letter also supported the NCUA's proposed update to management interlock thresholds under 12 CFR § 711, and recommended modernizing fidelity bond and insurance requirements under 12 CFR § 713 by increasing deductible limits and extending compliance periods from 30 days to 60 days. 
 
Additionally, DCUC encouraged the agency replace prescriptive succession planning requirements under 12 CFR § 701.4(e)(3) with a principles-based standard while retaining the existing director competency requirement under § 701.4(b)(3), which DCUC views as a foundational safeguard for effective governance and oversight. 
 
To expand access to affordable short-term credit, DCUC further recommended enhancements to the NCUA's Payday Alternative Loan (PALs) programs, including increasing loan limits, extending maturity options, allowing higher application fees to better offset operational costs, and eliminating the one-month membership requirement for PALs I loans. 
 
DCUC requested greater transparency and certainty in the NCUA's investment pilot program under 12 CFR § 703, including defined agency review timelines and additional clarity regarding eligible activities and collaborative applications. 
 
"Collectively, these recommendations outlined in this letter would reduce unnecessary regulatory burden, improve operational flexibility, and strengthen all credit unions’ ability to serve members while maintaining safety and soundness,” wrote DCUC Chief Advocacy Officer Jason Stverak. 
 
"DCUC appreciates the NCUA's ongoing efforts to review and modernize its regulations," says Anthony Hernandez, DCUC President/CEO, Ret. U.S. Air Force Colonel. "Periodic regulatory reviews are essential to ensure that legal and compliance requirements remain clear, effective, and appropriately tailored to the evolving credit union industry. Our recommendations are intended to provide meaningful flexibility while preserving the strong safety and soundness standards that protect credit unions and their members." 
 
"The credit union operating environment continues to evolve, and regulations should evolve with it," adds Stverak. "Whether addressing outdated thresholds, enhancing liquidity access, strengthening volunteer leadership opportunities, or improving small-dollar lending options, these recommendations are designed to help credit unions better meet member needs while supporting the long-term strength of the credit union system." 
 
DCUC noted that it may provide supplemental recommendations as the NCUA's review process continues and encouraged the agency to maintain robust stakeholder engagement through industry roundtables, town halls, webinars, and other outreach efforts. 
 
View DCUC’s official letter here. ​