The NCUA Board (Board) is amending its regulations that establish the requirements for obtaining and maintaining federal share insurance with the National Credit Union Share Ins...
The NCUA Board (Board) is amending its regulations that establish the requirements for obtaining and maintaining federal share insurance with the National Credit Union Share Insurance Fund (Share Insurance Fund). The provisions of this part apply to all federally insured credit unions (FICUs). This final rule will reduce regulatory burden by amending the provision on the timing of prior notice provided to members of the termination of excess non-federal insurance coverage.
DATES:
This final rule is effective on September 8, 2026.
FOR FURTHER INFORMATION CONTACT:
Thomas Zells, Senior Staff Attorney, Office of General Counsel, at (703) 518-6540 or at 1775 Duke Street, Alexandria, VA 22314.
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 the payment of insurance premiums and capitalization deposit. Subpart A of part 741 contains substantive requirements that are not codified elsewhere in NCUA's regulations. Subpart B lists additional regulations that are codified elsewhere in NCUA's regulations as applying to FCUs, which also apply to FISCUs. Section 741.5 requires a FICU that maintains excess share insurance coverage in addition to the coverage provided by the Share Insurance Fund to notify all members in writing at least 30 days before the effective date of any
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termination of that excess coverage. NCUA adopted this rule in 1986.[1]
On January 28, 2026, the Board published a notice of proposed rulemaking in the
Federal Register
proposing to amend the 30-day notification requirement in § 741.5 to provide more flexibility and reduce regulatory burden. Specifically, the Board proposed removing the 30-day requirement and simply requiring FICUs to notify members before any excess share insurance coverage is terminated. In the proposal, the Board noted that the 30-day timeframe imposes a prescriptive requirement not explicitly mandated by the FCU Act. While the Board believes members need to be notified before their excess coverage ends, requiring 30 days' prior notice may not provide sufficient flexibility or align with state law or contractual agreements. The Board is of the view that these timing considerations are best left to the discretion of each FICU board of directors and a more flexible standard would still satisfy the goal of informing members of the change before it occurs. The proposal did reiterate that FICUs should consider their member agreements and applicable state law requirements when determining adequate prior notice for members.
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.[2]
The FCU Act grants NCUA a broad mandate to issue 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.[3]
Section 207 of the FCU Act is a specific grant of authority over share insurance coverage, conservatorships, and liquidations.[4]
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.[5]
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. By the close of the public comment period on March 30, 2026, the Board had received 18 public comments. Comments were submitted by individuals, national trades organizations and state credit union leagues, a FICU, and an association of state credit union supervisors. Twelve commenters supported the proposal, five opposed it, and one suggested an alternate approach. After careful consideration of the issues raised by the commenters, the Board has decided to adopt the proposal without any substantive change. A summary of the comments received and the Board's responses to them are provided below.
B. Discussion of Public Comments
1. Comments in Support of the Proposed Change
Twelve commenters supported the removal of the 30-day notice requirement to FICU members before their excess insurance coverage ends. All 12 commenters cited the benefit of increased flexibility for FICUs. Five commenters specifically said that the change would provide flexibility without causing any material harm or burden to member awareness. Six commenters said the change would provide FICU boards the flexibility to implement notice time frames that reflect state law and the contractual requirements of individual private insurers, including provisions around the required time frame to notify members of excess insurance coverage termination. One noted that a mismatch between federal and contractual notice requirements can cause increased burdens tracking and reconciling differing notice requirements. They said this would reduce burdens for FISCUs by allowing them to focus compliance efforts on state requirements, rather than reconciling competing federal deadlines. Another commenter noted the 30-day requirement applies even if state law mandates a different notice period. One commenter said that removing NCUA's prescriptive rule allows states to tailor expectations and requirements for FISCUs.
Nine commenters cited the benefits of reduced regulatory and compliance burdens. Three commenters said the 30-day requirement can create operational constraints and felt the proposal would better accommodate operational realities. Eight noted the proposal maintains the same substance, requiring FICUs to notify members before terminating excess coverage so they can adjust accounts. Three of these commenters stressed the proposal does not prohibit FICUs from deploying their own, potentially longer, notification requirements, further empowering boards to manage member agreements. One commenter expressed support, but asked how NCUA will ensure FICUs still give members fair and adequate warning before their insurance drops.
NCUA Response
The Board agrees with the supportive commenters that the proposal will provide flexibility and regulatory relief without negatively impacting member awareness. As to how NCUA will ensure FICUs still provide members fair and adequate warning before their insurance drops, the Board believes the requirement to notify members in advance of any reduction of
excess
insurance coverage should provide members adequate notice and an opportunity to restructure any affected accounts. The Board stresses that this notice only relates to optional excess insurance coverage that a FICU has purchased from a private insurer above the minimum $250,000 in coverage provided to all FICU members by NCUA. Any notice provided to members is unrelated to and does not affect the share insurance coverage provided by NCUA. The Board also reiterates that notices for termination of excess insurance coverage are still subject to state law and contractual requirements.
2. Comments Opposing the Proposed Change
Five commenters provided comments in opposition, with three specifically addressing this proposal. One urged the Board to either retain the current standard or set some minimum for clarity and member protection, reasoning that the 30-day requirement is a clear and enforceable standard that protects FICU members compared to the proposed “prior to” termination standard that the commentor opined is vague. They felt the proposal leaves members vulnerable and could lead to a lack of transparency and adequate time for member account changes. Another commenter expressed vehement opposition to removing the 30-day requirement. A third commenter strongly opposed the change, arguing that, while it is valid to make processes more efficient, it should not come at the cost of removing FICU member protections. The commenter said citizens have a right to transparency about their coverage and what is done
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with their funds and said depositors' money should not be subject to the preferred efficiency of CEOs and executives. Two other commenters 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.
NCUA Response
The Board appreciates the commenters expressing their concerns, but disagrees that the change will negatively impact members or the safety and soundness of FICUs. The Board believes that the requirement to notify members in advance of any reduction of
excess
insurance coverage should provide members adequate notice and an opportunity to restructure any affected accounts. The Board again stresses that this notice only relates to optional excess insurance coverage that a FICU has purchased from a private insurer above the minimum $250,000 in coverage provided to all FICU members by NCUA. Any notice provided to members is unrelated to and does not affect the share insurance coverage provided by NCUA. The Board also reiterates that notices for termination of excess insurance coverage are still subject to state law and contractual requirements.
3. Comments Suggesting an Alternative Approach
One commenter proposed an alternative approach, suggesting that, to balance regulatory flexibility with consumer protection, NCUA establish a minimum baseline notification period (for example, 10-15 days) rather than eliminating the timeframe entirely. They felt this would still reduce burden while ensuring members retain a reasonable opportunity to respond to changes affecting their financial security. The commenter expressed concern that the more flexible standard in the proposal could result in inconsistent notification practices across institutions and insufficient time for members to make informed financial decisions. They worried a shorter or undefined notice period could disproportionately impact individuals who rely on excess coverage but may not closely monitor FICU communications.
NCUA Response
The Board appreciates the commenter's perspective and the rationale for their proposed alternative approach. However, the Board believes that maintaining a specific notification period would not address potential inconsistencies with state law and contractual notice requirements and thus would impose unnecessary burdens on FICUs. As stated above, the Board does not believe that the proposed change will negatively impact members or the safety and soundness of FICUs. The Board believes that the requirement to notify members in advance of any reduction of
excess
insurance coverage should provide members adequate notice and an opportunity to restructure any affected accounts. The Board stresses that this notice only relates to optional excess insurance coverage that a FICU has purchased from a private insurer above the minimum $250,000 in coverage provided to all FICU members by NCUA. Any notice provided to members is unrelated to and does not affect the share insurance coverage provided by NCUA. The Board also reiterates that notices for termination of excess insurance coverage are still subject to state law and contractual requirements.
In sum, the Board is adopting the proposed rule without substantive change. The final rule includes a plain language change—the phrase “prior to” is being changed to “before” in revised § 741.5. This new wording does not change the regulation's meaning.
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.[6] 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.[7]
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.[8]
This final rule is considered an Executive Order 14192 deregulatory action.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act [9]
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.[10]
For purposes of this analysis, NCUA considers small credit unions to be those having under $100 million in assets.[11]
The Board fully considered the potential economic impacts of the regulatory amendments on small credit unions.
The rule will reduce the regulatory burden on FICUs by eliminating the inflexible requirement for FICUs to notify members 30 days before excess non-Share Insurance Fund share insurance coverage is terminated. The Board does not expect the final rule to change FICUs' obligations to their members materially because FICUs will still be required to provide prior notice. 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 determined that the changes described in this final rule do not create a new information collection or revise an existing information collection as defined by the PRA.
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Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests.[12]
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 change will reduce regulatory burden by eliminating an unnecessary provision within NCUA's regulations imposing timing requirements on FICUs for providing member notice when excess non-federal insurance coverage is terminated. The change is not expected to change FICUs' obligations to their members materially and 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.[13]
While the change is intended to reduce regulatory burden generally to allow FICUs to focus on their provision of financial services to members, any potential positive effect on family well-being, 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.[14]
NCUA must submit a report to Congress and the Comptroller General when it issues a final rule, as defined by the CRA.[15]
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.
Notification of termination of excess insurance coverage.
In the event of a credit union's termination of share insurance coverage other than that provided by the NCUSIF, the credit union must notify all members in writing of such termination before the effective date of termination.
44 U.S.C. 3502(5)
12 CFR Part 741