Records Preservation Program and Appendices-Record Retention Guidelines; Catastrophic Act Preparedness Guidelines

Status: Comment period closes on May 11, 2026

Summary
On April 24, 2024, the NCUA Board (Board) published an advance notice of proposed rulemaking (ANPR) to solicit comments on ways the agency can improve and update its vital records preservation program regulation and accompanying guidelines. Based on public comments received in response to the ANPR and upon further consideration of the issues involved, the Board is publishing this proposed rule to simplify and streamline part 749. The Board is proposing to update part 749 by clarifying the purpose of the regulation, updating the definitions, and removing the appendices.

Link to full proposal:  https://www.federalregister.gov/public-inspection/2026-04761/records-preservation-program-and-appendices-record-retention-guidelines-catastrophic-act

Simplified Summary
The purpose of the proposed rule is to reduce the regulatory burden of vital records preservation. The proposed changes would ensure that only essential records are kept, and only for as long as they are necessary to restore important member services. The Board is proposing to update 12 CFR 749 by clarifying the purpose of the regulation, updating the definitions, and removing unnecessary references to recommendations and guidance.

The main proposed changes would remove both Appendix A and Appendix B entirely.

Proposed Changes

• Change 1: Remove Appendix A.
  • The Board proposes to remove Appendix A which was added as “suggested guidelines” but is often followed as a requirement. This has created an obstacle to sound record retention practices and has resulted in credit unions retaining unused and obsolete records. Appendix A duplicates language provided elsewhere in regulation and section C of Appendix A is overly prescriptive.
  • Impact on credit unions: Removing this section will give credit union boards of directors more discretion and flexibility to determine the process for records destruction.
• Change 2: Remove Appendix B.
  • The Board proposes to remove Appendix B because it is meant as guidance. Having guidance within the regulation leads to potential misinterpretation about what is required.
  • Impact on credit unions: This change will provide clarity on what is required by regulation and what is meant to be guidance.
• Change 3: Define vital member services and vital records. (12 CFR 749.1)
  • The proposed rule provides definitions for the terms vital member services and vital records to provide clarity. The current rule only explains them through examples.
  • Impact on credit unions: Providing these definitions will give credit unions a better understanding of what is considered vital in their records preservation programs.
• Change 4: Amend the rule title and scope to emphasize vital. (12 CFR 749)
  • The Board proposes to add the term vital to the heading of 12 CFR 749 so that it will read: Vital Records Preservation Program.
  • Impact on credit unions: This change will make it clear to credit unions that the scope of 12 CFR 749 is limited to vital records.
• Change 5: Clarify a records preservation log may be maintained electronically. (12 CFR 749.2(a))
  • The Board proposes to make clear that a records preservation log may be in electronic format.
  • Impact on credit unions: This change will create more flexibility for credit unions to manage and store vital records.
• Change 6: Clarify that, unless required by other law or regulation, older versions of vital records may be destroyed once their current versions are stored. (12 CFR 749.2(c))
  • The Board proposes to permit destruction of older versions of records unless required by other law or regulation.
  • Impact on credit unions: This change will allow credit unions to get rid of and no longer be responsible for unnecessary records.
• Change 7: Clarify NCUA expectations regarding contracts with a third party to maintain vital records. (12 CFR 749.3)
  • The Board proposes to state clearly the NCUA’s expectation that, if a credit union contracts with a third-party service provider to maintain its vital records, the credit union must maintain effective oversight of the third-party service provider to ensure the credit union meets its obligations under part 749.
  • Impact on credit unions: This change would provide clarity about the meaning of the regulation in a way that makes the regulation less burdensome for credit unions.

Third-party servicing of indirect vehicle loans (12 CFR Regulation 746.201)

Status: Comment period closes on May 26, 2026

Summary
The NCUA Board (Board) is seeking comment on a proposed rule that would remove the NCUA’s unnecessarily prescriptive regulation regarding third-party servicing of indirect vehicle loans. This action would reduce regulatory burden and provide credit unions with greater operational flexibility, consistent with a principles-based supervisory approach. The intent is to reduce administrative costs and compliance complexity, enabling credit unions to serve their members more efficiently.

Link to full proposal: https://www.federalregister.gov/public-inspection/2026-05797/third-party-servicing-of-indirect-vehicle-loans

Simplified Summary
Currently,12 CFR § 701.21(h), Third-party servicing of indirect vehicle loans, limits a federally insured credit union’s ability to purchase indirect auto loans serviced by a third party. Today, a credit union can only invest up to 50 percent of its net worth in indirect auto loans serviced by a third party. After 30 months of experience with a particular servicer, a credit union can invest up to 100 percent of its net worth in indirect auto loans serviced by that third party. The proposed rule would remove these overly prescriptive limitations. 

The requirements of 12 CFR § 701.21(h) are applied to state chartered credit unions in This is an external link to a website belonging to another federal agency, private organization, or commercial entity. 12 CFR § 741.203(c)(Opens new window) . NCUA regulation § 701.21(h), Third-party servicing of indirect vehicle loans, is also referenced in NCUA’s appeals rules in § 746.201(c), Scope. The proposed rule would also remove paragraph (c) from § 741.203 and the reference to § 701.21(h) found in § 746.201(c).

Proposed Changes

• The Board proposes to remove limits on federally insured credit unions’ ability to purchase or participate in indirect auto loans serviced by a third party by removing sections § 701.21(h) and § 741.203(c).
• Impact on credit unions: Removing these limits would reduce regulatory burden and allow credit unions and their boards greater flexibility to decide what amount of purchased indirect vehicle loans serviced by third parties is appropriate for the credit union’s size, the complexity of the transactions, and the board’s risk tolerance. 

Third-party servicing of indirect vehicle loans (12 CFR Regulation 701.21(h))

Status: Comment period closes on May 26, 2026

Summary
The NCUA Board (Board) is seeking comment on a proposed rule that would remove the NCUA’s unnecessarily prescriptive regulation regarding third-party servicing of indirect vehicle loans. This action would reduce regulatory burden and provide credit unions with greater operational flexibility, consistent with a principles-based supervisory approach. The intent is to reduce administrative costs and compliance complexity, enabling credit unions to serve their members more efficiently.

Link to full proposal: https://www.federalregister.gov/public-inspection/2026-05797/third-party-servicing-of-indirect-vehicle-loans

Simplified Summary
Currently, 12 CFR § 701.21(h), Third-party servicing of indirect vehicle loans, limits a federally insured credit union’s ability to purchase indirect auto loans serviced by a third party. Today, a credit union can only invest up to 50 percent of its net worth in indirect auto loans serviced by a third party. After 30 months of experience with a particular servicer, a credit union can invest up to 100 percent of its net worth in indirect auto loans serviced by that third party. The proposed rule would remove these overly prescriptive limitations. 

The requirements of 12 CFR § 701.21(h) are applied to state chartered credit unions in This is an external link to a website belonging to another federal agency, private organization, or commercial entity. 12 CFR § 741.203(c)(Opens new window) . NCUA regulation § 701.21(h), Third-party servicing of indirect vehicle loans, is also referenced in NCUA’s appeals rules in § 746.201(c), Scope. The proposed rule would also remove paragraph (c) from § 741.203 and the reference to § 701.21(h) found in § 746.201(c).

Proposed Changes

• The Board proposes to remove limits on federally insured credit unions’ ability to purchase or participate in indirect auto loans serviced by a third party by removing sections § 701.21(h) and § 741.203(c).
• Impact on credit unions: Removing these limits would reduce regulatory burden and allow credit unions and their boards greater flexibility to decide what amount of purchased indirect vehicle loans serviced by third parties is appropriate for the credit union’s size, the complexity of the transactions, and the board’s risk tolerance. 

NCUA Supervisory Priorities for 2026 under Chairman Kyle Hauptman include:

• Balance Sheet Management. Regarding lending, sensitivity to market risk and liquidity, earnings and capital adequacy.
• Operational Risk Management. Including payment systems and fraud prevention and detection.
• Compliance Risk Management. BSA compliance and AML/Countering the Financing of Terrorism (CFT) programs.

Details are available at NCUA.gov. Feedback or questions concerning the 2026 supervisory priorities should be directed to your NCUA examiner, regional office or AskNCUA.