On October 20, the NCUA announced the 13th round of proposals under its Deregulation Project, which reviews agency rules to keep them focused on credit unions’ “safety, soundness, and resilience.” This round includes three proposals. The first proposal would remove the requirement that federally insured, state-chartered credit unions keep a special reserve for nonconforming investments. These are investments that federal credit unions are not permitted to make, where book value exceeds market value or market value cannot be determined. The NCUA has required the reserve since the 1980s, but the agency said later GAAP changes have narrowed the requirement’s reach and the reserve does not add loss-absorbing capacity. The agency noted that only seven such credit unions currently report the reserve. The proposal would also delete related references in the NCUA’s capital, investment and insurance rules. The NCUA requested comment on alternatives, such as a higher risk weight for nonconforming investments.

The second proposal would give federally insured credit unions more flexibility in how they notify members about share insurance coverage. The current rule effectively requires hard copies of prescribed materials, such as the regulation itself or the agency’s 64-page brochure. Under the proposal, a credit union must still give notice but may choose its method, including a link to the NCUA’s website or the Electronic Code of Federal Regulations. The agency also plans to discontinue the brochure and update its share insurance website. The third proposal would remove an outdated provision that requires a federal credit union converting to a state charter to apply to an NCUA regional director to keep federal share insurance. Amendments to the agency’s Chartering and Field of Membership Manual have already moved that approval to its Office of Credit Union Resources and Expansion. The NCUA described this change as technical and non-substantive. Comments on all three proposals are due December 21.