Credit Union Regulatory Guidance Including: NCUA, CFPB, FDIC, OCC, FFIEC

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Treasury has issued a notice of proposed rulemaking implementing section 3 of the GENIUS Act — the provisions governing who may issue, offer, or sell payment stablecoins in the United States. The proposal would add a new part 1523 to title 12 of the CFR.

This episode is a condensed audio version of the proposal. What we cover:

• Who may issue: only permitted payment stablecoin issuers, plus foreign issuers meeting the section 18(a) criteria. Knowing participation in an unlawful issuance carries a fine up to $1 million per violation and up to five years imprisonment.
• Treasury's proposed definitions of "issue," "issuer," and "located in the United States" — terms the statute left undefined.
• Why Treasury concluded a stablecoin issuer can simultaneously be a digital asset service provider.
• The two "deemed not to" safe harbors: what a foreign issuer or a digital asset service provider must do — reasonable belief, implemented policies and controls, no U.S.-targeted advertising — to stay outside the prohibitions.
• Due diligence a digital asset service provider must perform before relying on a foreign issuer's representation about lawful-order compliance.
• Exemptions, safe harbors, severability, and Treasury's four proposed interpretations.
• The two alternatives Treasury is weighing, including a Regulation S-style offshore transaction framework.

Note for credit unions: Question 5 asks whether a digital asset redeemable only in credit union shares should be treated as a payment stablecoin. Worth watching.

Comments are due October 19, 2026, at regulations.gov.

If your credit union would like help preparing for an NCUA exam, visit MarkTreichel.com.

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We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

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Is an NCUA DOR an Enforcement Action?

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Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!

We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

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Hello, this is Samantha Shares. This episode covers Interagency Guidance on Lending to Individuals Not Legally Authorized to Work in the United States.

The following is an audio version of that document. This podcast is educational and is not legal advice. We are sponsored by Credit Union Exam Solutions Incorporated, whose team has over two hundred and forty years of National Credit Union Administration experience. We assist our clients with N C U A so they save time and money. If you are worried about a recent, upcoming, or in process N C U A examination, reach out to learn how they can assist at Mark Treichel dot com. Also check out our other podcast called With Flying Colors where we provide tips on how to achieve success with N C U A.

And now the document.

Federal Deposit Insurance Corporation. National Credit Union Administration. Office of the Comptroller of the Currency. July thirteenth, twenty twenty-six.

Interagency Guidance on Lending to Individuals Not Legally Authorized to Work in the United States.

On May nineteenth, twenty twenty-six, the President issued the Executive Order, Restoring Integrity to America's Financial System, to address risks to the financial system posed by the extension of credit or financial services to the inadmissible and removable population. In accordance with the Executive Order, the Office of the Comptroller of the Currency, Treasury, referred to as the O C C, the Federal Deposit Insurance Corporation, referred to as the F D I C, and the National Credit Union Administration, referred to as the N C U A, and collectively referred to as the agencies, are issuing this guidance to remind supervised financial institutions of their existing obligations with respect to credit risk management, particularly as it relates to borrowers who are not legally authorized to work in the United States, referred to as non-work authorized borrowers.

Credit Risk and Underwriting Considerations.

Lending to individuals who are not legally authorized to work in the United States may present elevated credit risk because a borrower's ability to generate income, maintain employment, and remain financially stable may be subject to greater uncertainty. As with all lending activities, financial institutions should identify, measure, monitor, and control these risks through safe and sound underwriting practices that assess a borrower's willingness and capacity to repay according to the terms of the credit obligation.

Safe and sound underwriting is a key risk-management tool that helps financial institutions evaluate whether a borrower can repay a credit obligation according to its terms. Such underwriting includes assessing the source of repayment, the borrower's repayment capacity, and the borrower's overall financial condition, resources, and willingness to repay as agreed. When lending to non-work authorized borrowers, financial institutions should consider whether uncertainties related to employment authorization may affect the stability and sustainability of income, repayment capacity, collateral recovery, or other factors relevant to credit risk.

The following sections discuss key underwriting considerations related to the source of repayment, collateral considerations, documentation and verification, portfolio and concentration considerations, and consumer compliance risk.

Source of Repayment.

Underwriting standards typically consider the stability and sustainability of a borrower's income and the likelihood that the income will continue throughout the term of the credit obligation.

In retail lending, wages or self-employment income are often the primary source of repayment. When a borrower's income is derived from employment that is not legally authorized, the source of repayment may be less reliable and may present increased credit risk for various reasons, including: employment termination due to an employee not having legal work authorization; employment suspension or termination after discovering that an employee's employment authorization is expired; the borrower's inability to become lawfully reemployed; or the borrower's removal from the United States.

Financial institutions should consider whether projected repayment capacity remains adequate under various scenarios including potential interruptions in employment or income resulting from the borrower's inability to maintain lawful employment.

Collateral Considerations.

Financial institutions may face additional challenges enforcing security interests in collateralized loans, as it may be more difficult to contact non-work authorized borrowers or locate and repossess unaffixed collateral, such as automobiles, recreational vehicles, and boats.

Documentation and Verification.

Financial institutions might consider whether employment income is current, verifiable, stable, and likely to continue. Financial institutions might consider, as relevant, requiring and reviewing paystubs, W two forms, tax returns, employer verifications, bank statements, or evidence of continuing work authorization. Financial institutions may consider whether loans to non-work authorized borrowers, individually or in segments, exhibit signs of credit weakness regardless of delinquency status for classification purposes and treatment in the allowance for credit losses.

Portfolio and Concentration Risk Considerations.

Financial institutions with significant lending exposure to borrowers concentrated in specific geographic markets, employers, or industries that may be disproportionately affected by changes in immigration enforcement, employment verification practices, labor availability, or workforce disruptions may face elevated concentration risk. These changes could adversely affect the repayment capacity of multiple borrowers simultaneously. As a result, financial institutions may experience correlated credit deterioration within affected segments of the portfolio rather than isolated borrower-level stress.

Consumer Compliance Risk.

On June eighth, twenty twenty-six, the Consumer Financial Protection Bureau, referred to as the C F P B, issued the Statement on Ability To Repay and Immigration Status, to remind creditors of their obligations under the Truth in Lending Act, referred to as T I L A, as implemented by Regulation Z. As the C F P B observes, under T I L A and Regulation Z, before lending to consumers for dwelling secured transactions like mortgages, creditors must make a reasonable and good faith determination at or before consummation that the consumer will have a reasonable ability to repay the loan according to its terms. Regulation Z sets forth parameters that lenders must follow to make such reasonable and good faith determinations of a customer's ability to repay applicable consumer credit products. Further, the C F P B advises that credit card issuers must consider the consumer's ability to make required minimum periodic payments.

The C F P B advises that, when determining repayment ability, creditors relying on an individual's income derived from United States based employment are permitted, and may, under certain facts and circumstances, be obligated, to consider information that bears on the consumer's underlying and continuing ability to earn income, when residency in the United States is a necessary component of such employment.

With respect to the Equal Credit Opportunity Act, referred to as E C O A, as implemented by Regulation B, the C F P B observes that E C O A expressl...

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NCUA Chairman Kyle S. Hauptman's Testimony Before the House Financial Services Committee.

Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!

We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

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This epsiode covers the FDIC Risk review for 2026.

Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!

We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

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NCUA Proposes to Modernize Rules on Loan-Related Compensation

The NCUA Board has issued a proposed rule that would update a regulation last revised more than 30 years ago — the rules governing how credit union employees and officials can be compensated in connection with loans to members.

What NCUA is proposing:

• Adding a new regulatory definition of "overall financial performance" to Section 701.21(c)(8)
• Expressly allowing incentive and bonus payments tied to lending metrics, as long as they are based on the credit union's overall financial performance
• Explicitly extending this flexibility to senior management employees, not just rank-and-file staff
• Defining "overall financial performance" as a quantifiable metric or set of metrics set by the board of directors, which may include lending-related goals such as aggregate loan growth or loan performance measures like delinquency or loss rates

Why the change is happening:

• Credit unions have reported confusion about whether loan-related metrics can factor into "overall financial performance"
• NCUA regions have applied the current rule inconsistently
• The existing framework is viewed as outdated and unduly restrictive, especially for senior executive compensation
• The change aligns with the Board's broader deregulatory efforts under Executive Order 14219 and was informed by 27 comments on a 2019 ANPR

What is NOT changing:

• The general prohibition on officials and employees receiving commissions, fees, or other compensation directly in connection with a specific loan remains intact
• The four existing exceptions in 701.21(c)(8)(iii) remain in place
• Safety and soundness expectations are unchanged — no compensation plan may permit unsafe or unsound practices, unsafe reliance on individual metrics, or compensation that conflicts with other applicable laws
• The rule continues to apply to FISCUs through Section 741.203(a)

The 10,000-foot takeaway: NCUA is giving credit unions more room to design modern, competitive compensation plans — including for senior executives — that reflect a balanced mix of performance goals, while keeping guardrails against risky loan-driven incentive structures. Boards will need to document how their compensation metrics support the credit union's goals without encouraging unsafe practices.

Comments are due April 27, 2026.

For help preparing for an NCUA exam, visit MarkTreichel.com.

Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!

We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

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NCUA Proposes to Eliminate Financial Literacy Training Deadline for New FCU Directors

The NCUA Board has issued a proposed rule that would remove the requirement that each federal credit union director attain a working familiarity with basic finance and accounting within six months of being elected or appointed.

What NCUA is proposing:

• Eliminate Section 701.4(b)(3), which currently sets a six-month deadline for new FCU directors to achieve working familiarity with finance and accounting, including the ability to read balance sheets and income statements and ask substantive questions of management and auditors.
• Redesignate the remaining paragraph accordingly.

Why the change is occurring:

• The Board now views the six-month rule as overly prescriptive.
• FCU members are in the best position to elect qualified directors.
• The Federal Credit Union Act gives each FCU board "general direction and control" but does not direct NCUA to set specific director qualifications.
• The proposal aligns with the administration's deregulatory priorities under Executive Order 14192.

What is NOT changing:

• The Board still believes directors must have a working familiarity with basic finance and accounting practices.
• NCUA will continue evaluating board and management capability through the CAMELS Rating System as part of risk-focused examinations.
• The broader fiduciary duties outlined in Section 701.4 remain in place.

The 10,000-foot takeaway: NCUA is stepping back from a prescriptive training deadline and putting the responsibility for director competency back where the Board believes it belongs — with the FCU itself and its members. Boards should not interpret this as a pass on financial literacy. Examiners will still assess whether directors can actually identify, measure, monitor, and control risk. If anything, this shifts the burden from "complete training within six months" to "demonstrate ongoing competence" — which is a higher bar in practice.

Comments are due April 27, 2026.

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We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

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NCUA Proposes to Streamline Vital Records Preservation Rule

The NCUA Board has issued a proposed rule to simplify and streamline Part 749, the regulation governing credit union vital records preservation programs. The proposal responds to years of industry feedback that the current rule, particularly its appendices, has become unnecessarily burdensome and confusing.

What NCUA is proposing:

• Rename Part 749 to "Vital Records Preservation Program" to clarify its scope
• Add formal definitions for "vital member services" and "vital records" rather than relying only on examples
• Clarify that a records preservation log may be kept in electronic format
• Confirm that older versions of vital records may be destroyed once current versions are stored, unless other law or regulation requires otherwise
• Require credit unions that use third-party service providers to maintain effective oversight of those vendors
• Eliminate Appendix A (Record Retention Guidelines) entirely
• Eliminate Appendix B (Catastrophic Act Preparedness Guidelines) entirely
• Remove the cross-reference to Appendix A from the derivatives rule at 12 CFR 703.105(d)

Why the change is occurring:

In 2024, NCUA issued an ANPR and received 25 comment letters. Commenters overwhelmingly said Appendix A's recommendation to retain certain documents permanently was being treated as a requirement by examiners and credit union staff, leading to retention of records with no real operational value. Commenters also said the appendices duplicated the regulation, created confusion between guidance and enforceable rules, and drove up storage, conversion, and security costs, especially for smaller credit unions.

What is NOT changing:

• The core obligation for FICUs to maintain a written vital records preservation program
• The board of directors' responsibility for establishing the program within six months of insurance certification
• Sections 749.4 and 749.5 on format flexibility (no changes proposed)
• NCUA's longstanding practice of not prescribing specific retention periods for individual documents
• The treatment of off-site data processor arrangements as compliant when the service agreement protects against simultaneous destruction of production and backup data

10,000-foot takeaway:

NCUA is moving away from permanent-retention recommendations and prescriptive destruction procedures, and putting record retention judgment back where it belongs: with each credit union's board of directors. If finalized, credit unions should expect less ambiguity between what is a regulatory requirement and what is merely guidance, and a meaningful reduction in the pressure to retain documents indefinitely. Comments are due by May 11, 2026.

Visit MarkTreichel.com for help preparing for your next NCUA exam.

Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!

We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

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NCUA Proposes to Eliminate Prescriptive Limits on Third-Party Serviced Indirect Vehicle Loans

The NCUA Board is seeking comment on a proposed rule that would remove the agency's longstanding regulation governing federally insured credit union purchases of indirect vehicle loans serviced by third parties. Comments are due by May 26, 2026.

What NCUA is proposing:

• Remove Section 701.21(h), which currently caps indirect vehicle loans and participations purchased from any one third-party servicer at 50% of net worth (rising to 100% after 30 months of experience with that servicer)
• Remove the parallel requirement in Section 741.203(c) that applies these same limits to federally insured, state-chartered credit unions
• Remove the related waiver process, the associated Regional Director timelines, and the related citation in the appeals rule at Section 746.201(c)

Why the change:

• The 2006 rule was built around a rigid, one-size-fits-all framework that the Board now views as unduly burdensome
• The Board believes each credit union's board is in the best position to tailor policies to its own size, risk profile, and complexity of transactions
• The action is consistent with a principles-based supervisory approach and is expected to qualify as a deregulatory action under Executive Order 14192
• It is also intended to reduce administrative costs and compliance complexity so credit unions can serve members more efficiently

What is NOT changing:

• Credit union boards are still responsible for safety and soundness, due diligence, and appropriate controls over indirect lending programs
• NCUA will continue to monitor third-party indirect vehicle lending through the examination process
• The underlying legal authority, and NCUA's ability to act on unsafe or unsound practices, remains intact

10,000-foot takeaway: NCUA is trading a bright-line concentration cap for board-level judgment. Credit unions gain flexibility, but the expectation is that internal policies, third-party due diligence, and concentration management become more robust, not less. If this is finalized, examiner scrutiny of indirect program governance will matter more, not less.

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Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!

We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.

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NCUA is proposing to streamline its rule on the purchase, sale, and pledge of eligible obligations (12 CFR 701.23).

What NCUA is proposing:

• Remove the prescriptive lists of items that FCUs must address in their written purchase, sale, and pledge policies
• Remove the detailed code of conduct in paragraph (g) governing conflicts of interest and compensation tied to these transactions
• Make a conforming redesignation (current 701.23(h) becomes 701.23(g)) and update the cross-reference in the appeals rule at 12 CFR 746.201(c)
• Comments are due April 27, 2026

Why NCUA is making the change:

• The current one-size-fits-all framework is viewed as unduly burdensome, especially for smaller FCUs
• The FCU Act requires NCUA to issue rules in this area but does not require a detailed framework for internal credit union policies
• An FCU's board is in the best position to scale policies to its own activities and risk profile
• The existing compensation prohibition, with a narrow list of exceptions, is seen as inflexible and may hinder legitimate incentive structures
• FCUs are already governed by broader conflict of interest provisions in their bylaws and by the fiduciary duties of their officials
• The change aligns with a more principles-based supervisory approach

What is NOT changing:

• FCUs must still maintain written policies covering purchase, sale, and pledge of eligible obligations
• Board approval remains required, and transactions must be conducted at arm's length and in the best interest of the credit union
• The underlying statutory authority under section 107(13) of the FCU Act is unchanged
• Examiner oversight of these activities continues
• The rule applies only to FCUs — the basic framework for FISCUs is unaffected

10,000-foot takeaway: NCUA is shifting from prescriptive checklists to principles-based expectations for eligible obligation policies. FCUs get more flexibility to tailor their written policies and incentive structures, but they also keep full responsibility for safe and sound operations. Boards should start thinking now about how their existing policies would hold up under a principles-based exam — the guardrails are coming out, but the accountability is not.

If your credit union would like help preparing for an NCUA exam, visit MarkTreichel.com.

Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!

We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.

Hire us and gain:

• Peace of mind during your exam process

• Insider knowledge of NCUA procedures and expectations

• Strategies to address potential issues before they become problems

• Continuous access to our extensive subject matter expertise

With our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union achieves flying colors in its next examination.

Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.