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

Samantha: Hello, this is Samantha Shares.

This episode covers N C U A’s
2026 Supervisory Priorities,

Letter to Credit Unions.

The following is an audio
version of that document.

This podcast is educational
and is not legal advice.

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And now the document.

Date, January 2026.

Letter number 26 C U dash zero one.

N C U A’s 2026 Supervisory Priorities.

N C U A Letter to Credit Unions.

National Credit Union Administration,
seventeen seventy-five Duke

Street, Alexandria, Virginia,
two two three one four.

To federally insured credit unions.

Subject, N C U A’s 2026
Supervisory Priorities.

Dear boards of directors and
chief executive officers.

This letter outlines N C U A’s
supervisory priorities and other

2026 examination program updates.

Our priorities focus on areas posing the
highest risk to credit union members, the

credit union industry, and the National
Credit Union Share Insurance Fund.

Consistent with the agency’s no
regulation by enforcement policy,

this letter is meant to assist credit
unions as they plan for this year.

In 2025, the agency reexamined how
we carry out our mission, laying the

foundation for improved efficiency
by reducing burdensome work for both

credit unions and N C U A staff.

Moving forward, the agency will be
focused on creating a more efficient and

tailored examination program, as well as
continued implementation of presidential

executive orders and other laws, including
the Guiding and Establishing National

Innovation for U S Stablecoins Act,
Public Law one one nine dash two seven.

N C U A will continue conducting defined
scope exams in most federal credit

unions with assets of fifty million
dollars or less, and risk-focused exam

procedures for all other credit unions.

The priorities described below are meant
to provide credit unions with insight into

the general focus of N C U A examinations.

N C U A examiners are expected
to shift the areas of supervisory

focus based on a credit union’s
risk profile when appropriate.

The agency will continue to enforce
all laws and regulations applicable

to credit unions, such as those
related to consumer financial

protection and information security.

N C U A examiners will continue to focus
on areas of risk where and when needed.

Supervisory priorities for 2026.

Balance sheet management.

Lending.

Loan growth has moderated in recent years,
while loan performance has declined.

The overall delinquency rate and rolling
twelve-month loss rate within federally

insured credit union loan portfolios is
at its highest point in over a decade.

Asset quality deterioration and
elevated loan losses remain material

contributors to balance sheet stress,
especially where higher-cost funding

such as share certificates and
borrowings limit margin recovery.

To assess lending practices and overall
credit risk, N C U A examiners will

focus on credit union lending and
related risk management practices.

Specific review areas will focus on
institution-specific risks and may

include the sufficiency of credit
administration, including loan

underwriting, loss mitigation programs,
including loan modifications and workouts,

allowance for credit loss reserves and
methodologies, and charge-off practices.

N C U A examiners will review portfolio
monitoring, including the management of

any material credit risk concentrations.

When lending, servicing, or collection
functions are outsourced, examiners

will also assess third-party risk
management practices as appropriate.

For lending-related resources, refer to
the Examiner’s Guide and the following.

Twenty-three C U dash zero five,
Commercial Real Estate Loan

Accommodations and Workouts.

Twenty-three C U dash zero four,
Update to Interagency Policy Statement

on Allowances for Credit Losses.

Fourteen C U dash zero eight,
Home Equity Lines of Credit

Nearing Their End-of-Draw Period.

Zero seven C U dash one three,
Evaluating Third Party Relationships.

Zero three C U dash zero one,
Loan Charge-off Guidance.

Supervisory Letter ten dash
zero three, Concentration Risk.

Sensitivity to market risk and liquidity.

Sensitivity to market risk, particularly
interest rate risk, and liquidity risk

remain key supervisory priorities as
credit unions continue to adjust to

a higher-rate environment following
an extended period of balance

sheet expansion and repricing.

While recent declines in interest
rates have lessened some pressures,

elevated funding costs, asset quality
challenges, and structural liquidity

constraints continue to affect
earnings and balance sheet resilience.

In this environment, replacing
defaulted or lower-yielding assets has

become more challenging, increasing
reliance on higher-yielding loans

and heightening sensitivity to both
upward and downward rate movements.

While interest rates have begun to
decline, many loans and funding costs

have not yet fully repriced, resulting
in continued, albeit less, pressure on

consumers compared with peak rate levels.

Recent liquidity challenges have
reinforced the importance of

diversified funding strategies and
robust liquidity risk management.

Accordingly, credit unions should
expect continued supervisory focus

on these areas to ensure institutions
can withstand a range of interest

rate and funding stress conditions.

N C U A examiners will continue
to review a credit union’s ability

to identify, measure, monitor, and
control interest rate and liquidity

risks through sound modeling
practices, reasonable assumptions,

and appropriately tiered scenarios.

Reviews will focus on how credit unions
incorporate these risks into governance

frameworks, contingency funding plans,
and strategic decision-making, including

alignment between balance sheet structure,
funding composition, and risk appetite.

For more sensitivity to market
and liquidity risk information,

refer to the resource list below.

Examiner’s Guide, Liquidity
and Sensitivity to Market Risk.

Twenty-two C U dash zero nine, Updates to
Interest Rate Risk Supervisory Framework.

Supervisory Letter twenty-two
dash zero one, Updates to Interest

Rate Risk Supervisory Framework.

Webpage, Liquidity Risk Resources.

Earnings and capital adequacy.

Earnings and capital adequacy remain
central supervisory priorities as asset

quality pressures, elevated funding costs,
and interest rate risk volatility continue

to affect balance sheet performance.

Asset quality deterioration and higher
allowance expenses remain the primary

drivers of earnings pressure, while
elevated funding costs constrain margin

recovery and capital accumulation.

Although regulatory capital levels,
as measured by the net worth ratio,

have improved for many credit unions,
earnings have shown less resilience.

Further, equity capital continues to
reflect unrealized losses associated

with long-duration securities credit
unions acquired during the recent

low-rate environment, which may limit
balance sheet flexibility under stress.

When evaluating a credit union’s earnings,
N C U A examiners will assess whether

the current and prospective sources of
earnings are sufficient to support capital

targets under a range of interest rate,
credit, and liquidity stress scenarios.

N C U A examiner reviews may focus on
policies, procedures, risk limits, and

capital planning practices, including
how credit unions incorporate interest

rate risk, funding constraints,
and concentration risks into their

capital adequacy assessments.

This supervisory approach will
emphasize forward-looking analysis

aligned with a credit union’s
size, complexity, and risk profile.

For more earnings and
capital-related information,

refer to the resource list below.

Examiner’s Guide, Earnings.

Supervisory Letters zero nine dash
zero three, Reviewing Adequacy

of Earnings, and zero six dash
zero one, Evaluating Earnings.

Webpage, Regulatory and
Compliance Resources.

Operational risk management.

Payment systems.

The payments environment continues to
evolve rapidly as consumer expectations

shift toward more efficient methods
that provide for immediate access

to funds and funds transfers.

Payment systems rely on increasingly
complex integrations of applications,

information systems, interfaces,
security features, and internal controls.

This complexity introduces the
potential for added operational

and security risk exposures.

The risks of fraudulently induced
payments, illicit use of consumer data,

and cybersecurity breaches targeting
payment systems continue to grow.

N C U A examiners will continue to assess
whether credit unions have effective

governance, risk assessments, vendor
management, and security frameworks

in place to support payment system
operations, protect member data, and

ensure resilience against fraud and cyber
threats inherent in payment ecosystems.

For more payment systems information,
refer to the retail payment systems

and the wholesale payment systems
topics in the Federal Financial

Institutions Examination Council’s
I T Examination Handbook Infobase.

Fraud prevention and detection.

Fraud remains a pervasive and elevated
risk in the U S financial system.

N C U A examiners will continue to
review credit union efforts to deter

and detect fraud, including the adequacy
of internal controls and separation of

duties to guard against insider abuse.

In 2026, the agency will review its
examination procedures to ensure internal

control and other review areas align
with the ever-changing fraud landscape.

N C U A will continue to work with
key stakeholders in the credit union,

regulatory, and law enforcement
communities to enhance fraud

prevention and detection awareness
and capabilities where possible.

Visit N C U A’s Fraud Prevention Resources
page for fraud prevention information.

Compliance risk management.

Bank Secrecy Act compliance and
anti-money laundering and countering

the financing of terrorism programs.

The B S A landscape will continue
to evolve throughout 2026.

The Financial Crimes Enforcement
Network and the federal financial

institution regulators, including N C U
A, continue to implement provisions of

the Anti-Money Laundering Act of 2020
designed to modernize and strengthen

the U S A M L and C F T regime.

Concurrently, F I N C E N and the
regulators will continue to evaluate

ways to reduce B S A compliance
burdens while helping financial

institutions maintain effective,
risk-based A M L and C F T programs.

Significant developments and
changes in the regulatory

system are expected in 2026.

N C U A will notify credit unions
of regulatory changes, and credit

union personnel may also sign up
to receive F I N C E N updates.

Regardless of the notification method,
credit unions should stay informed

to ensure their B S A policies,
procedures, internal controls, and

overall A M L and C F T programs
remain in compliance with changes.

The emphasis in 2026 will be on evaluating
your credit union’s risk-based approach

to B S A compliance and how well the A
M L and C F T program is tailored to the

credit union’s specific risk profile.

N C U A examiners will consider whether
credit unions focus their resources on

the areas of greatest money laundering
and terrorist financing risk and

whether policies, procedures, and
controls are effective at mitigating

illicit financial activity risks.

For more information and
resources, visit the agency’s B

S A and A M L resources webpage.

Conclusion.

N C U A is dedicated to supporting credit
unions, developing right-sized regulations

and policies that safely advance
innovation within the credit union system,

and protecting member deposits and the
Share Insurance Fund through productive,

streamlined credit union supervision.

Focusing on these priorities,
along with reviewing areas of risk

specific to each credit union, N C
U A’s examination and supervision

program will continue to facilitate
a safe and sound credit union system.

We welcome your feedback as we
navigate the ever-changing economic

and technological ecosystems together.

As a reminder, credit unions may find
it useful to record their N C U A final

exit meeting or joint conference for
documentation and training purposes.

We ask that this recording
be shared with N C U A.

We encourage state-chartered credit
unions to consult their regulators

prior to recording meetings.

Please direct any feedback or questions
concerning the 2026 supervisory

priorities to your N C U A examiner,
regional office, or Ask N C U A.

Sincerely, Kyle S.

Hauptman, Chairman.

This concludes the document.

If your credit union could use assistance
with your exam, reach out to Mark Treichel

on LinkedIn or at Mark Treichel dot com.

This is Samantha Shares, and
we thank you for listening.