On January 27, the NCUA announced a fourth round of proposed regulatory changes under its ongoing “Deregulation Project,” seeking to reduce administrative burden and eliminate duplicative requirements for federally insured credit unions (FICUs) (previously covered by InfoBytes here). The agency requested public comments on four proposals published in the Federal Register:

1. Public Unit and Nonmember Shares: The NCUA proposed removing the requirement, codified at 12 CFR 701.32(b)(2), for credit union boards to develop a written plan for the use of public unit and nonmember shares when such funds, together with borrowings, exceed 70 percent of the “paid-in and unimpaired capital and surplus.” The agency stated that this change would allow boards greater flexibility in managing funding sources.
2. Notice of Termination of Excess Insurance Coverage: The agency proposed eliminating the rule, codified at 12 CFR 741.5, requiring a 30-day advance notice to members before terminating supplemental share insurance coverage. FICUs would still be required to provide notice, but the 30-day timing requirement would no longer apply.
3. Maximum Borrowing Authority: The NCUA proposed removing the regulation that limits aggregate borrowing to 50 percent of “paid-in and unimpaired capital and surplus” for FICUs (codified at 12 CFR 741.2). The agency noted that statutory limits for federal credit unions would remain, while federally insured, state-chartered credit unions (FISCUs) would be subject to state laws, where applicable.
4. Disclosure of Share Insurance: The agency proposed rescinding the disclosure requirement for nonmember share insurance, codified at 12 CFR 741.10, stating that it duplicates a contractual requirement for maintaining federal share insurance. The NCUA emphasized that FISCUs still must comply with Form 9600 to maintain federal share insurance.

Comments on the four proposals must be submitted by March 30.