Federally insured credit unions have only a few weeks left to comment on a pair of proposed rule revisions issued by the National Credit Union Administration (NCUA).
The agency published reminders that the deadline to submit comments about its proposed succession planning rule is Sept. 23 and the comment period for proposed revision and extension of the “Credit Union Profile” (Form 4501A) ends Sept. 24. The profile form is used to collect information about a credit union’s characteristics and operations.
The NCUA Board approved the succession planning rule revisions by a 2-1 vote in July. The revised rule would require boards of directors at federally insured credit unions (FICUs) to establish and adhere to processes for succession planning. This new proposed rule modifies the 2022 proposal based on the public comments received and upon further consideration of the issues.
“Succession planning is vital to the long-term success of any institution, including credit unions,” NCUA Chair Todd Harper said during the July NCUA Board meeting. “A credit union board’s failure to plan for the transition of its management and key decision-makers could come with high costs, including the potential for an unanticipated merger of the credit union when key personnel depart. In my view, it’s better to maintain many small credit unions serving a wide variety of purposes and niche markets than continuing to consolidate credit unions into ever larger institutions.”
The NCUA is encouraging all credit unions to have succession plans in place for filling key positions and ensuring continuity of their operations, regardless of asset size. These succession plans should be consistent with the size and complexity of the credit union, the agency noted in a press release.
With respect to the NCUA’s rule revising the profile, the agency is proposing the following general changes:
- “Adding the name of the credit ’union’s automated anti-money laundering (AML) monitoring system to enhance ’NCUA’s ability to evaluate a credit union’s Bank Secrecy Act/AML program.
- “Separating the question relating to the credit union’s field of membership from the Minority Depository Institution question relating to current members. The Interpretive Ruling and Policy Statement that establishes the criteria for a credit union to be considered a Minority Depository Institution was revised in March 2024.”
The proposed revisions to Form 4501A would also extend the profile by three years and would be adopted for the December 2024 cycle.