[Federal Register Volume 91, Number 18 (Wednesday, January 28, 2026)]
[Proposed Rules]
[Pages 3688-3690]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-01698]
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NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 741
RIN 3133-AF97
Notice of Termination of Excess Insurance Coverage
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
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SUMMARY: The NCUA Board (Board) is issuing for public comment a
proposal to amend the NCUA's regulations that establish the
requirements for obtaining and maintaining federal share insurance with
the National Credit Union Share Insurance Fund (Share Insurance Fund).
The provisions of this part apply to all federally insured credit
unions (FICUs). The proposal would reduce regulatory burden by amending
the provision on the timing of prior notice provided to members of the
termination of excess non-federal insurance coverage.
DATES: Comments must be received by March 30, 2026.
ADDRESSES: Comments may be submitted in one of the following ways.
(Please send comments by one method only):
Federal eRulemaking Portal: https://www.regulations.gov.
The docket number for this proposed rule is NCUA-2026-0135. Follow the
``Submit a comment'' instructions. If you are reading this document on
federalregister.gov, you may use the green ``SUBMIT A PUBLIC COMMENT''
button beneath this rulemaking's title to submit a comment to the
regulations.gov docket. A plain language summary of the proposed rule
is also available on the docket website.
Mail: Address to Melane Conyers-Ausbrooks, Secretary of
the Board, National Credit Union Administration, 1775 Duke Street,
Alexandria, Virginia 22314-3428.
Hand Delivery/Courier: Same as mailing address.
Mailed and hand-delivered comments must be received by the close of
the comment period.
Public Inspection: Please follow the search instructions on https://www.regulations.gov to view the public comments. Do not include any
personally identifiable information (such as name, address, or other
contact information) or confidential business information that you do
not want publicly disclosed. All comments are public records; they are
publicly displayed exactly as received and will not be deleted,
modified, or redacted. Comments may be submitted anonymously. If you
are unable to access public comments on the internet, you may contact
the NCUA for alternative access by calling (703) 518-6540 or emailing
[email protected].
FOR FURTHER INFORMATION CONTACT: Thomas Zells, Senior Attorney, Office
of General Counsel, at (703) 518-6540 or at 1775 Duke Street,
Alexandria, VA 22314.
SUPPLEMENTARY INFORMATION:
I. Introduction
A. Background
Part 741 generally applies to federal credit unions (FCUs),
federally insured, state-chartered credit unions (FISCUs), and credit
unions applying for insurance of accounts pursuant to Title II of the
Federal Credit Union Act (FCU Act). This part prescribes various
requirements for obtaining and maintaining federal share insurance and
the payment of insurance premiums and capitalization deposit. Subpart A
of part 741 contains substantive requirements that are not codified
elsewhere in the NCUA's regulations. Subpart B lists additional
regulations that are codified elsewhere in the NCUA's regulations as
applying to FCUs, which also apply to FISCUs.
As discussed later in this preamble, the Board is proposing to
amend a regulatory requirement in subpart A of part 741 to provide more
flexibility and reduce regulatory burden. Section 741.5 requires a FICU
to provide written notification to all members at least thirty days
before the termination of any excess share insurance coverage beyond
that provided by the Share Insurance Fund. The proposed rule would
remove the 30-day requirement and simply require FICUs to notify
members before any excess share insurance coverage is terminated.
B. Legal Authority
The Board is issuing this proposal pursuant to its authority under
the FCU Act. Under the FCU Act, the NCUA is the chartering and
supervisory authority for FCUs and the federal supervisory authority
for FICUs.\1\ The FCU Act grants the NCUA a broad mandate to issue
regulations governing both FCUs and all FICUs. Section 120 of the FCU
Act is a general grant of regulatory authority and authorizes the Board
to prescribe rules and regulations for the administration of the FCU
Act.\2\ Section 207 of the FCU Act is a specific grant of authority
over share insurance
[[Page 3689]]
coverage, conservatorships, and liquidations.\3\ Section 209 of the FCU
Act is a plenary grant of regulatory authority to issue rules and
regulations necessary or appropriate to carry out its role as share
insurer for all FICUs.\4\ Accordingly, the FCU Act grants the Board
broad rulemaking authority to ensure that the credit union industry and
the Share Insurance Fund remain safe and sound.
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\1\ 12 U.S.C. 1752-1775.
\2\ 12 U.S.C. 1766(a).
\3\ 12 U.S.C. 1787.
\4\ 12 U.S.C. 1789.
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II. Proposed Rule
Section 741.5 requires a FICU that maintains excess share insurance
coverage in addition to the coverage provided by the Share Insurance
Fund to notify all members in writing at least 30 days before the
effective date of any termination of that excess coverage. The NCUA
adopted this rule in 1986.\5\
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\5\ 51 FR 37549 (Oct. 23, 1986).
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The Board is now proposing to amend the 30-day notification
requirement for terminating any excess insurance. The Board believes
the 30-day timeframe imposes a prescriptive requirement not explicitly
mandated by the FCU Act. While member notification of such a change in
insurance coverage is needed, requiring 30-days prior notice may not
provide sufficient flexibility or align with state law or contractual
agreements. The Board believes timing considerations are best left to
the discretion of each FICU board of directors. FICUs should consider
their member agreements and applicable state law requirements when
determining adequate prior notice for members, provided members are
notified before coverage is terminated. A more flexible standard would
still satisfy the goal of informing members of the change before it
occurs.
The Board solicits comments on all aspects of this proposal.
III. Regulatory Procedures
A. Providing Accountability Through Transparency Act of 2023
The Providing Accountability Through Transparency Act of 2023 (5
U.S.C. 553(b)(4)) requires that a notice of proposed rulemaking include
the internet address of a summary of not more than 100 words in length
of a proposed rule, in plain language, that shall be posted on the
internet website under section 206(d) of the E-Government Act of 2002
(44 U.S.C. 3501 note) (commonly known as regulations.gov).
In summary, the Board is issuing for public comment a proposal to
amend the NCUA's regulations that establish the requirements for
obtaining and maintaining federal share insurance with the Share
Insurance Fund. The provisions of this part apply to all FICUs. The
proposal would reduce regulatory burden by amending the provision that
requires 30 days' notice be provided to members before excess non-
federal insurance coverage is terminated. The proposal and the required
summary can be found at https://www.regulations.gov.
B. Executive Orders 12866, 13563, and 14192
Pursuant to Executive Order 12866 (``Regulatory Planning and
Review''), as amended by Executive Order 14215, a determination must be
made whether a regulatory action is significant and therefore subject
to review by the Office of Management and Budget (OMB) in accordance
with the requirements of the Executive Order.\6\ Executive Order 13563
(``Improving Regulation and Regulatory Review'') supplements and
reaffirms the principles, structures, and definitions governing
contemporary regulatory review established in Executive Order 12866.\7\
This proposed rule was drafted and reviewed in accordance with
Executive Order 12866 and Executive Order 13563. OMB has determined
that this proposed rule is not a ``significant regulatory action'' as
defined in section 3(f)(1) of Executive Order 12866. Further, this
proposed rule is consistent with Executive Order 13563. The proposed
rule will reduce the burden of catastrophic act reporting by increasing
the time FICUs have to report to the agency and giving them the
flexibility to determine what to incorporate into their record of an
incident.
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\6\ 58 FR 51735 (Oct. 4, 1993).
\7\ 76 FR 3821 (Jan. 21, 2011).
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Executive Order 14192 (``Unleashing Prosperity Through
Deregulation'') requires that any new incremental costs associated with
new regulations shall, to the extent permitted by law, be offset by the
elimination of existing costs associated with at least 10 prior
regulations.\8\ This proposed rule is expected to be a deregulatory
action for purposes of Executive Order 14192.
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\8\ 90 FR 9065 (Feb. 6, 2025),
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C. Regulatory Flexibility Act
The Regulatory Flexibility Act \9\ generally requires an agency to
conduct a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements, unless the agency certifies that
the rule will not have a significant economic impact on a substantial
number of small entities. If the agency makes such a certification, it
shall publish the certification at the time of publication of either
the proposed rule or the final rule, along with a statement providing
the factual basis for such certification.\10\ For purposes of this
analysis, the NCUA considers small credit unions to be those having
under $100 million in assets.\11\ The Board fully considered the
potential economic impacts of the regulatory amendments on small credit
unions.
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\9\ 5 U.S.C. 601 et seq.
\10\ 5 U.S.C. 605(b).
\11\ 80 FR 57512 (Sept. 24, 2015).
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The proposed rule would reduce the regulatory burden on FICUs by
eliminating the inflexible requirement for FICUs to notify members 30
days before excess non-Share Insurance Fund share insurance coverage is
terminated. The Board does not expect the proposal to change FICUs'
obligations to their members materially because FICUs will still be
required to provide prior notice.
Accordingly, the NCUA certifies the proposed rule would not have a
significant economic impact on a substantial number of small credit
unions.
D. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) generally provides that
an agency may not conduct or sponsor, and not withstanding any other
provision of law, a person is not required to respond to, a collection
of information, unless it displays a currently valid Office of
Management and Budget control number. The PRA applies to rulemakings in
which an agency creates a new or amends existing information collection
requirements. For purposes of the PRA, an information-collection
requirement may take the form of a reporting, recordkeeping, or a
third-party disclosure requirement. The NCUA has determined that the
changes described in this notice do not create a new information
collection or revise an existing information collection as defined by
the PRA.
E. Executive Order 13132 on Federalism
Executive Order 13132 encourages certain agencies to consider the
impact of their actions on state and local interests. The NCUA, an
agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the
executive order to adhere to fundamental federalism principles. The
proposal would reduce regulatory burden by eliminating an unnecessary
provision within the NCUA's regulations imposing timing requirements on
FICUs for providing
[[Page 3690]]
member notice when excess non-federal insurance coverage is terminated.
The proposal is not expected to change FICUs' obligations to their
members materially and thus would not have a direct effect on the
states, the relationship between the national government and the
states, or on the distribution of power and responsibilities among the
various levels of government.
F. Assessment of Federal Regulations and Policies on Families
The NCUA has determined that this proposed rule would not affect
family well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999.\12\ While the proposed
change is intended to reduce regulatory burden generally to allow FICUs
to focus on their provision of financial services to members, any
potential positive effect on family well-being, including financial
well-being is, at most, indirect.
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\12\ Public Law 105-277, 112 Stat. 2681 (1998).
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List of Subjects in 12 CFR Part 741
Bank deposit insurance, Credit, Credit unions, Reporting and
recordkeeping requirements.
By the National Credit Union Administration Board, this 23rd day
of January, 2026.
Melane Conyers-Ausbrooks,
Secretary of the Board.
For the reasons stated in the preamble, the NCUA Board proposes to
amend 12 CFR part 741 as follows:
PART 741--REQUIREMENTS FOR INSURANCE
0
1. The authority citation for part 741 continues to read as follows:
Authority: 12 U.S.C. 1757, 1766(a), 1781-1790, and 1790d; 31
U.S.C. 3717.
0
2. Revise Sec. 741.5 to read as follows:
Sec. 741.5 Notice of termination of excess insurance coverage.
In the event of a credit union's termination of share insurance
coverage other than that provided by the NCUSIF, the credit union must
notify all members in writing of such termination prior to the
effective date of termination.
[FR Doc. 2026-01698 Filed 1-27-26; 8:45 am]
BILLING CODE 7535-01-P