SUPPLEMENTARY INFORMATION:

I. Introduction

A. Background

Part 741 generally applies to federal credit unions (FCUs), federally insured, state-chartered credit unions (FISCUs), and credit unions applying for insurance of accounts pursuant to title II of the Federal Credit Union Act (FCU Act). This part prescribes various requirements for obtaining and maintaining federal share insurance and paying insurance premiums and the capitalization deposit. Subpart A of part 741 contains substantive requirements that are not codified elsewhere in NCUA's regulations. Subpart B lists additional regulations, set forth elsewhere in NCUA's regulations as applying to FCUs, that also apply to FISCUs.

A FISCU that is permitted by state law to accept nonmember shares or deposits from sources other than other credit unions and public units (or, for low-income designated credit unions, any nonmembers) must, under NCUA's current regulation § 741.10, identify such accounts on all required reports to NCUA and notify all nonmember account holders in writing that their accounts are not insured by the Share Insurance Fund.

Section 741.10 applies to FISCUs that are permitted by state law to accept nonmember shares or deposits from sources other than those provided for in the FCU Act. Shares or deposits from other credit unions and public units or, for low-income-designated credit unions, from any nonmembers, are included as insurable accounts under the FCU Act.^[1] For any other nonmember funds permitted by state law, § 741.10 requires FISCUs to identify such nonmember accounts as nonmember shares or deposits on any statement or report required by the Board for insurance purposes. Immediately after a state-chartered credit union receives notice from NCUA that its member accounts are federally insured, § 741.10 requires the credit union to advise any present nonmember share and deposit holders, by letter, that their accounts are not insured by the Share Insurance Fund. FISCUs are similarly required to notify any future nonmember share and deposit fund holders by letter as they open accounts.

To reduce regulatory burden, on January 28, 2026, the Board published a notice of proposed rulemaking in the Federal Register proposing to eliminate § 741.10 of subpart A of part 741 as its provisions are redundant to the disclosures FISCUs already must make as part of their agreement for maintaining federal share insurance.^[2] NCUA adopted this regulation in 1995 to incorporate requirements already imposed on FISCUs by the Agreement for Insurance of Accounts, which must be completed by state-chartered credit unions applying for federal share insurance.^[3] Current NCUA Form 9600, “Information to be Provided in Support of the Application of a State Chartered Credit Union for Insurance of Accounts,” maintains these same requirements.^[4]

As noted in the proposal, the Board is now of the view that, to minimize the volume of regulations and other materials FICUs must review to comply with legal and contractual requirements, § 741.10 should be removed as duplicative of the contractual requirement imposed on FISCUs as part of maintaining federal share insurance. Thus, the Board proposed to remove § 741.10 but stressed that FISCUs are still contractually required to fulfill the terms of NCUA Form 9600 as a condition of maintaining federal share insurance coverage.

In the proposal, the Board also solicited comments suggesting changes that should be made to § 741.9 of NCUA's regulations, which prohibits FICUs from offering members shares that are not eligible for federal share insurance coverage.

B. Legal Authority

The Board is issuing this final rule pursuant to its authority under the FCU Act. Under the FCU Act, NCUA is the chartering and supervisory authority for FCUs and the federal supervisory authority for FICUs.^[5] The FCU Act grants NCUA a broad mandate to issue ( printed page 50687) regulations governing both FCUs and all FICUs. Section 120 of the FCU Act is a general grant of regulatory authority and authorizes the Board to prescribe rules and regulations for the administration of the FCU Act.^[6] Section 207 of the FCU Act is a specific grant of authority over share insurance coverage, conservatorships, and liquidations.^[7] Section 209 of the FCU Act is a plenary grant of regulatory authority to issue rules and regulations necessary or appropriate to carry out its role as share insurer for all FICUs.^[8] Accordingly, the FCU Act grants the Board broad rulemaking authority to ensure that the federally insured credit union industry and the Share Insurance Fund remain safe and sound.

II. Final Rule

A. Overview

This final rule follows publication of the proposed rule and takes into consideration the comments received on the proposal. When the public comment period closed on March 30, 2026, the Board had received 12 public comments. Comments were submitted by individuals, state leagues and national trades, and an association of state credit union supervisors. Eleven commenters supported the proposal. One generally opposed NCUA's deregulatory initiative. After careful consideration of the issues raised by the commenters, the Board has decided to adopt the proposal without change.

B. Discussion of Public Comments

This section of the preamble discusses the significant issues raised by the commenters, and the Board's responses to the comments.

All 11 supportive commenters concurred with the Board's assessment that the provision is an unnecessary regulatory requirement that is duplicative of the contractual obligations imposed by Form 9600 for maintaining share insurance. This contract clearly and independently sets forth the requirements to identify nonmember share or deposit accounts and to notify nonmembers that such accounts are not insured by the Share Insurance Fund. One state league provided a FICU's comment noting the redundancy does not enhance consumer understanding or safety but does create additional administrative work. The commenter said the proposal streamlines compliance expectations while preserving all essential disclosure requirements. Three commenters said the proposal maintains essential protections while streamlining compliance by eliminating unnecessary notifications and cutting duplicative paperwork and reporting. Three commenters cited benefits to small FICUs. The Board appreciates and agrees with these comments.

One commenter suggested that NCUA should provide a more standardized plain-language document to ensure compliance with the contractual obligations under Form 9600 and that all people, including those lacking great financial literacy, receive consistent information across all FISCUs. They suggested that the final rule contain a clear reminder that even though the regulatory section is being removed, the requirement to notify nonmembers of a lack of federal insurance remains a condition of maintaining federal share insurance. The commenter also agreed with the Board's determination that the changes will not negatively impact families' well-being. The Board appreciates the commenter's input but has not seen evidence of a need to provide FICUs a standardized notice document. The Board also believes it clearly stated in the proposal that the removal of § 741.10 does not remove FISCUs' contractual obligation to fulfill the terms of NCUA Form 9600 as a condition of maintaining federal share insurance coverage. Nevertheless the Board reiterates here that the removal of § 741.10 does not remove FISCUs contractual obligation to notify nonmembers of their lack of federal share insurance remains a condition of maintaining federal share insurance.

One commenter voiced general opposition to NCUA's deregulatory actions and expressed that the actions inappropriately prioritized reducing regulatory burdens at the expense of protecting consumers and the safety of FICUs. The Board appreciates the commenter's input but strongly disagrees that NCUA's deregulatory actions have prioritized reducing regulatory burdens at the expense of protecting consumers and the safety of FICUs.

Separately, in response to the proposal's request for additional comments on § 741.9, which prohibits offering member shares not eligible for federal share insurance coverage, one commenter supported considering removing § 741.9. This commentor generally supports greater flexibility for FISCUs, but stressed that the volume of deregulatory proposed rules has not provided sufficient time to thoroughly analyze the implications of removing the prohibition. The commenter said removing § 741.9 also might be beneficial, should the credit union system obtain access to supplemental capital for net worth purposes on par with credit unions worldwide. The Board appreciates the commenter's input and will continue to consider it as it evaluates any future changes.

III. Regulatory Procedures

A. Executive Orders 12866, 13563, and 14192

Pursuant to Executive Order 12866 (“Regulatory Planning and Review”), a determination must be made whether a regulatory action is significant and therefore subject to review by the Office of Information and Regulatory Affairs (OIRA), within the Office of Management and Budget (OMB) in accordance with the requirements of the Executive Order.^[9] Executive Order 13563 (“Improving Regulation and Regulatory Review”) supplements and reaffirms the principles, structures, and definitions governing contemporary regulatory review established in Executive Order 12866.^[10] This final rule was drafted and reviewed in accordance with Executive Order 12866 and Executive Order 13563. OIRA has determined that this final rule is not a “significant regulatory action” as defined by section 3(f) of Executive Order 12866.

Executive Order 14192 (“Unleashing Prosperity Through Deregulation”) requires that any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.^[11] This final rule is considered an Executive Order 14192 deregulatory action.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act ^[12] generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. If the agency makes such a certification, it shall publish the certification at the time of publication of either the proposed rule or the final rule, along with a statement providing the factual basis for such certification.^[13] For purposes of this analysis, NCUA considers small credit unions to be those having under $100 million in ( printed page 50688) assets.^[14] The Board fully considered the potential economic impacts of the regulatory amendments on small credit unions.

The final rule will reduce regulatory burdens on FICUs by eliminating an unnecessary and redundant section within NCUA's regulations, which imposes requirements on FICUs for obtaining and maintaining federal share insurance. Its removal simplifies the regulatory code by eliminating unnecessary text. Accordingly, NCUA certifies the final rule will not have a significant economic impact on a substantial number of small credit unions.

C. Paperwork Reduction Act

The Paperwork Reduction Act of 1995 (PRA) generally provides that an agency may not conduct or sponsor, and not withstanding any other provision of law, a person is not required to respond to a collection of information, unless it displays a currently valid OMB control number. The PRA applies to rulemaking in which an agency creates a new or amends existing information collection requirements. For purposes of the PRA, an information collection requirement may take the form of a reporting, recordkeeping, or a third-party disclosure requirement. NCUA has reviewed this rule and determined that it does not create any new or revise any existing collections of information. Accordingly, no PRA submissions to OMB will be made with respect to this rule.

D. Executive Order 13132 on Federalism

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests.^[15] NCUA, an agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. The final rule will reduce regulatory burden by eliminating an unnecessary and redundant section within NCUA's regulations imposing requirements on FICUs for obtaining and maintaining federal share insurance. Thus the rulemaking will not have direct effect on the states, the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

E. Assessment of Federal Regulations and Policies on Families

NCUA has determined that this final rule will not affect family well-being within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999.^[16] The final rule will reduce regulatory burden by eliminating an unnecessary and redundant section within NCUA's regulations imposing requirements on FICUs for obtaining and maintaining federal share insurance. While the rescission is intended to reduce regulatory burden generally to allow FCUs to focus on their provision of financial services to members, any potential positive effect on family wellbeing, including financial well-being is, at most, indirect.

F. Congressional Review Act

Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996, also known as the Congressional Review Act (CRA), generally provides for congressional review of agency rules.^[17] NCUA must submit a report to Congress and the Comptroller General when it issues a final rule, as defined by the CRA.^[18] An agency rule, in addition to being subject to congressional oversight, may also be subject to a delayed effective date if the rule is a “major rule.” OIRA has determined that this rule is not a “major rule” within the meaning of the relevant sections of the CRA. NCUA will also file appropriate reports with Congress and the Comptroller General so this rule may be reviewed.

For the reasons stated in the preamble, the NCUA Board amends 12 CFR part 741 as follows:

91 FR 50686