The National Credit Union Administration (NCUA) voted to approve two key final rules during the board’s sixth open meeting this year. These regulations address second-chance hiring practices and outline revisions to existing share insurance regulations for credit unions.
Second chance hiring in credit unions
The two NCUA board members in attendance unanimously approved a final rule allowing individuals with convictions for certain minor or older offenses to seek employment in the credit union industry without requiring NCUA board approval. The rule will codify Section 205(d) of the Federal Credit Union Act, integrating the NCUA’s Second Chance Interpretive Ruling and Policy Statement (IRPS 19-1) and the Fair Hiring in Banking Act into applicable regulations.
“Providing career opportunities for those who want nothing more than a second chance — to be responsible, to earn an honest wage, and to pursue a rewarding career in the credit union system — is a tale of redemption and inspiration,” NCUA Chairman Todd Harper said in a press release. “It’s also a matter of equity. And, it proves people have the capacity to make amends and change the direction of their lives for the better.”
Section 205(d) generally bars individuals convicted of offenses involving dishonesty or breach of trust from working in credit unions without NCUA consent. The final rule, however, excludes minor offenses, such as drug possession, and older misdemeanors, from this restriction. It also adjusts regulations for newly chartered or troubled credit unions regarding board and staff changes.
The rule is set to become effective 30 days after its publication in the Federal Register.
Simplifying share insurance regulations
The NCUA also approved a final rule designed to streamline share insurance regulations by creating a new “trust accounts” category. This rule was crafted to align with insurance coverage for revocable and irrevocable trust accounts at federally insured credit unions with the Federal Deposit Insurance Corp.’s coverage for such accounts at banks.
“That’s a positive change not only for credit union staff who will have streamlined procedures when working on such trust accounts, but it’s also a benefit for credit union members who will better understand their coverage options,” Harper said.
He further asserted the change would benefit credit union staff and members by providing clearer coverage options.
The rule also will provide consistent share insurance treatment for mortgage servicing accounts and affords the NCUA more flexibility in determining insurance coverage during liquidations.
The trust account coverage changes take effect on Dec. 1, 2026, while the mortgage servicing account provisions will take effect 30 days after publication in the Federal Register.
Harper and NCUA Vice Chair Kyle Hauptman were the only board members in attendance. Tanya Otsuka was not present for the votes.