Rules that have outlived their purpose still cost something, and the NCUA‘s latest cleanup round is a good example of why trimming them matters.
The National Credit Union Administration has announced the fourteenth round of its Deregulation Project, an ongoing review meant to keep the agency’s regulations focused on credit unions’ safety, soundness, and resilience. This round includes two final rules and one proposal, and the proposal is open for public comment.
The Proposal: Retiring a Transitional Provision
The NCUA Board is asking for comments on removing 12 CFR 723.9, a transitional provision in the commercial lending regulation. The provision was added in the 2016 commercial lending rule. Its job was to cover credit unions operating under certain NCUA-approved waivers or supervisory actions while the industry moved to a principles-based framework.
That transition is over. The Board has concluded the provision has served its purpose and is no longer needed. Removing it would cut regulatory complexity and make the NCUA’s rulebook easier to read. Nobody ever called a transitional rule a lifetime appointment, though this one stayed on the books a while.
One note on process: the NCUA describes the proposal as an interim final rule that removes the provision, and it is seeking public comment on it.
Final Rule One: PPP Loans Made Permanent
The Board adopted a final rule under 12 CFR Parts 702 and 723 that makes permanent the regulatory treatment of Paycheck Protection Program (PPP) loans. That treatment has been in place since April 27, 2020. The provisions were first adopted during the COVID-19 pandemic to implement the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Credit unions get a settled, lasting rule instead of a pandemic-era arrangement.
Final Rule Two: A Definition That Wasn’t Needed
The Board also amended 12 CFR 701.39 by removing paragraph (a)(1). That paragraph defined the phrase “except as otherwise provided by law or except as otherwise provided by federal law.” The Board found the definition unnecessary, since credit unions are already responsible for identifying and following applicable laws when they use their statutory lien authority.
The change does not touch a credit union’s statutory lien authority or its existing legal obligations.
How the Changes Are Categorized
- 12 CFR 723.9: obsolete regulation
- 12 CFR Parts 702 and 723: obsolete regulation
- 12 CFR 701.39(a)(1): listed in the NCUA’s table under a separate category from the other two
How to Comment
To weigh in, enter the docket numbers in the search box on the Federal Rulemaking Portal. Detailed summaries of each item are available at ncua.gov/news/deregulation-project.
What to Watch Next
Keep an eye on the comment period for the 12 CFR 723.9 removal, and on whether the Board changes anything after reading the feedback. Since this is the fourteenth round, expect more batches of obsolete or duplicative rules to follow. Credit unions should check each new round for provisions that touch their own operations.