This week, the Defense Credit Union Council (DCUC) submitted four comment letters to the National Credit Union Administration (NCUA) in response to the agency’s first round of regulatory relief proposals. DCUC’s letters collectively express strong support for the NCUA’s efforts to modernize regulations, reduce unnecessary compliance burdens, and provide credit unions with greater flexibility to better serve their members.
“Efforts to streamline regulations, taken together, provide meaningful relief to credit unions and allow them to devote more resources to serving members rather than complying with superfluous or dated requirements,” DCUC wrote.
Corporate Credit Union Governance and Filing Requirements
In its first letter, DCUC supported the NCUA’s proposal to remove the requirement that a corporate credit union’s asset and liability management committee (ALCO) include at least one board member, as well as proposed changes to annual report and independent audit filing requirements.
“DCUC strongly supports the NCUA’s proposal,” DCUC states. “The current ALCO composition requirement is overly prescriptive, and a corporate credit union board should have the discretion to determine its committee membership. There is no gain or benefit in restricting a corporate credit union’s preference in this instance.”
DCUC also agreed that several filing requirements related to corporate annual reports and management letters are unnecessary and duplicative, noting that this information is already available to the agency through the examination process.
“These filing requirements impose an unnecessary compliance burden with no benefit to the credit union industry or the public,” DCUC wrote, while recommending modest flexibility to ease timelines for notifying the agency when an independent public accountant departs.
Supervisory Committee Audits and Verifications
In a second letter, DCUC supported the NCUA’s proposal to streamline regulations governing supervisory committee audits and verifications, describing the current framework as overly detailed in ways that do not enhance audit integrity.
“This proposal appropriately simplifies compliance for credit unions without compromising the integrity of the audit process,” DCUC said.
DCUC supports changes to definitions of internal controls, greater flexibility in account verification methods, and the removal of duplicative or explanatory language better addressed through auditing standards rather than regulation.
“These provisions are a clear example of regulatory detail that is superfluous and time-consuming with no corresponding benefit,” DCUC added.
Moving Appendix A and Appendix B Out of the CFR
In two additional letters, DCUC supported the NCUA’s proposal to remove Appendix A and Appendix B to Part 748 from the Code of Federal Regulations and instead publish them as Letters to Credit Unions.
DCUC emphasized that both appendices consist of guidance intended to help credit unions meet statutory obligations, not enforceable regulatory requirements.
“The language of Appendix A does not contain prescriptive regulatory requirements,” DCUC wrote. “Rather, it provides guidelines, recommendations, and examples of how credit unions may maintain compliance.”
Similarly, DCUC supported removing Appendix B from regulatory text, noting that its guidance-based structure could be misconstrued as legally binding when included in the CFR.
“It would be clearer to credit unions if this guidance were not included in regulatory text signifying strict compliances.”
DCUC noted that relocating the appendices would not weaken expectations around data security or cybersecurity, which DCUC described as among the most significant risks facing credit unions today. Instead, the change would clarify regulatory obligations while allowing guidance to be updated more efficiently.
Additional Recommendations
DCUC encouraged the NCUA to continue reviewing its regulations to ensure guidance language is not embedded in enforceable regulatory text, where it could be misinterpreted as a legal requirement. DCUC also urged the agency to improve transparency by publishing summaries of regulatory relief changes in a dedicated, highlighted section of its website.
“This would allow credit unions to quickly identify changes, update policies and procedures, and effectively train their teams,” adding that continued regulatory streamlining, paired with clear distinctions between requirements and guidance, will strengthen compliance, promote innovation, and better position credit unions to meet member needs in an evolving financial landscape.