The National Credit Union Administration held its latest board meeting with three main items on the agenda: where they stand on cutting red tape, how the Share Insurance Fund is doing, and why they’re spending less money than usual. Let’s break down what matters here.
The Deregulation Project: Phase One Wraps, Phase Two Gets Real
Amanda Parkhill, who’s currently running the Office of Examination and Insurance, gave the board an update on their ongoing effort to make life easier for credit unions. Think of it as Marie Kondo-ing the regulatory framework — if a rule doesn’t spark joy (or serve a legitimate purpose), it’s getting tossed.
Phase One of the Deregulation Project has already pushed out more than 30 proposals to cut unnecessary regulations. The public weighed in with hundreds of comments, and NCUA is working through the feedback to finalize these changes. Phase Two is coming soon, and it’ll tackle the bigger, messier stuff — complex policy issues and operational headaches that require more than a quick fix.
Four New Rules Worth Knowing About
Parkhill also highlighted four final rules NCUA rolled out recently:
Dependent Care and Board Member Reimbursement: Federal credit unions can now reimburse volunteer board members for expenses like dependent care. The goal? Remove barriers that might stop qualified people from serving just because they can’t afford a babysitter during board meetings.
Records Preservation Update: NCUA cleaned up its records requirements, ditched two appendices that weren’t pulling their weight, updated some definitions, and incorporated feedback from public comments. Essentially housekeeping, but the useful kind.
Non-Interest Charges and Fees (The Interchange Fee Rule): Here’s where it gets interesting. NCUA issued an interim final rule clarifying that federal credit unions have the authority to charge non-interest fees, including interchange fees — and that state laws can’t override this federal authority.
Why does this matter? The Office of the Comptroller of the Currency (OCC) recently issued a similar rule for national banks. NCUA wanted to make sure federal credit unions weren’t at a competitive disadvantage. The message is clear: when it comes to these fees, federal law is the only law that applies to federal credit unions. State regulators need to stay in their lane.
No More “Reputation Risk” As a Regulatory Weapon: This rule prohibits NCUA from telling credit unions to close accounts or deny services based on someone’s protected class or political views. In the past, some regulators weaponized the vague concept of “reputation risk” to push ideological agendas that had nothing to do with actual financial safety and soundness. This rule shuts that door by requiring NCUA’s supervisory decisions to be grounded in actual data, not personal opinions.
The Share Insurance Fund: Strong but Skating on Thin Ice
Melissa Lowden, NCUA’s Acting Chief Financial Officer, briefed the board on the Share Insurance Fund’s health using an interactive dashboard that’s publicly available on NCUA.gov. The good news? The fund is strong heading into 2026, backed by solid credit union performance overall.
First quarter numbers show the fund grew by just under $400 million from Q4 2025, bringing total assets to $24.5 billion. Total reserves climbed to $249.3 million, and cash and investments hit $23.9 billion — up 5.9 percent from Q1 2025.
Credit union health metrics looked decent too. The number of institutions with CAMELS ratings of 3 (think: “needs improvement”) dropped from 653 to 636. Credit unions rated 4 or 5 (the danger zone) decreased from 117 to 107. More than 92 percent of credit unions maintained CAMELS ratings of 1 or 2, which means they’re in good shape.
Three credit unions failed in Q1 2026, costing the Share Insurance Fund $5.7 million.
But Here’s the Problem Nobody Wants to Talk About
The NCUSIF ratio — the key metric measuring the fund’s health — is sitting right at the legal minimum of 1.3 percent. Not above it. Right at it.
And there’s a $95 million loss from Jackson Area FCU waiting in the wings. If NCUA can’t recover those funds, that loss alone could push the ratio below the 1.3 percent threshold. What happens then? Credit unions across the system would have to pony up to restore the fund to its required level.
So while everything looks stable on paper, the fund is essentially walking a tightrope with no safety net. One good shove — like that Jackson Area FCU loss hitting all at once — and credit unions could be writing checks they weren’t planning for.
NCUA Is Spending Less, and They Want You to Know It
In the mid-year budget update, Lowden shared that through May 2026, NCUA’s spending was down 17.1 percent compared to last year. Across the board — employee compensation, operations, everything — spending is lower than it’s been in three years.
Chairman Hauptman seemed pleased, stating he’s “encouraged by the movement on agency reorganization projects” and expects the budget to keep trending in this direction. Translation: we’re running leaner, and we plan to keep it that way.
Whether this belt-tightening is strategic efficiency or a response to political pressure depends on who you ask. Either way, the numbers show NCUA is doing more with less — at least for now.
Related:
Take the money and run: The NCUA’s CU-to-MSB Conversion Disclosure Proposal
Jackson Area FCU Under Federal Conservatorship — Here’s What Members Need to Know