NCUA Board Approves Proposed Rules on Incentive-based Compensation, Succession Planning

Maintains 18-percent Loan Interest Rate Ceiling for Federal Credit Unions

The National Credit Union Administration Board held its fifth open meeting of 2024 and approved a proposed rule on incentive-based compensation and a revised proposed rule on succession planning. The NCUA Board also approved maintaining the current interest rate ceiling for federal credit unions at 18 percent.

Board Approves Proposed Incentive-based Compensation Rule

The NCUA Board approved by a vote of 2–1 a proposed rule to address incentive-based compensation arrangements, as required under section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 956 requires federal financial institutions regulators, including the NCUA, to issue joint regulations or guidelines requiring disclosure and reporting of compensation at financial institutions with more than $1 billion in assets.

“In just three days, we will mark the fourteenth anniversary of the enactment into law of the Dodd-Frank Wall Street Reform and Consumer Protection Act,” NCUA Chairman Todd H. Harper said. “This rulemaking effort is about providing transparency and accountability. This regulatory effort will better focus the leaders of financial firms on the long-term health of the company instead of just their short-term personal gain. That’s good for the credit union system, and it’s good for our financial markets.”