NCUA deregulation proposals announced October 14 would change how credit unions approve fidelity bonds, request recognition of new incidental powers, and administer Central Liquidity Facility membership. Several requirements would remain, including annual board review of fidelity bond coverage and the process for seeking Board approval of activities outside preapproved incidental powers.
The twelfth round of NCUA’s Deregulation Project contains three proposed rules. NCUA lists December 14, 2026, as the comment deadline for each. The proposals were placed on public inspection October 14 and are scheduled for Federal Register publication October 15. They are proposals, rather than effective rule changes.
NCUA deregulation would change bond approval procedures
The fidelity bond proposal would amend parts 704 and 713, which govern corporate credit unions and fidelity bond coverage for federally insured credit unions.
Under the proposal, a credit union’s full board would no longer have to review and approve every application to purchase or renew fidelity bond coverage. A duly authorized member of the board, supervisory committee, or audit committee could perform that review and approval.
The purchase or renewal agreement and its attachments would still have to be signed by a nonemployee board member or a duly authorized nonemployee member of the supervisory or audit committee. NCUA would also remove the requirement to rotate signatories between consecutive agreements.
Annual board review of coverage would remain. NCUA says that review can preserve oversight while allowing credit unions to delegate the application work.
Another change would end the automatic expiration of NCUA approval for fidelity bond forms after 10 years. Credit unions would still have to use approved forms, and NCUA would retain authority to review forms and rescind approvals.
The proposal would also remove advisory provisions in part 713 that say credit unions should buy coverage above regulatory minimums when circumstances warrant and maintain increased coverage based on cash on hand or money in transit. It would leave the minimum-coverage table in place. NCUA says boards would remain responsible for selecting coverage adequate for their institution’s risk profile.
For corporate credit unions, NCUA separately seeks comment on whether to remove the duty in section 704.18(d)(2) to obtain coverage above the minimum when necessary. That provision is a request for feedback; its removal is not included in the proposed amendments.
Incidental powers: clarifying an optional opinion
The incidental-powers proposal would revise part 721 to clarify that a federal credit union can petition the NCUA Board directly for approval of an activity outside the preapproved categories.
Existing language says a credit union should first seek an advisory opinion from NCUA’s Office of General Counsel. NCUA says that wording has created confusion about whether an opinion is required, even though obtaining one has always been optional.
The proposal would remove that sentence. Federal credit unions could still seek legal guidance from the office, and the application process for recognizing additional activities would remain.
NCUA also proposes to clarify that an activity approved through an application would be recognized as an incidental power for all federal credit unions. Part 721 would expressly state that it does not apply to corporate credit unions.
CLF payments would follow an invoice
The Central Liquidity Facility proposal would update part 725, finalize certain changes made through pandemic-era interim final rules, and remove provisions whose temporary authority has expired.
One proposed change would replace the March 31 deadline for annual capital stock subscription adjustments. Members would instead have to make adjustment payments within 90 calendar days of receiving a CLF invoice.
NCUA would also streamline membership documentation and reporting where information is already available through its examination process. The proposal would retain authority to request financial reports and other information from non-federally insured institutions that are not otherwise subject to NCUA examination.
A separate annual audit requirement for CLF agent members would be limited to non-federally insured corporate credit unions. NCUA says federally insured corporate credit unions already face an independent audit requirement under part 704.
The six-month restriction would remain
The proposed CLF text would retain the provision that a newly admitted agent member may not receive an advance during its first six months without CLF approval, subject to the provision’s existing exceptions. NCUA proposes to remove an obsolete date reference and renumber the provision. The rule’s preamble says that amendment is intended to make no substantive change.
Comments due December 14
NCUA’s Deregulation Project page lists the comment deadline as December 14, 2026. Comments can be submitted through the Federal eRulemaking Portal using docket NCUA-2026-1882 for fidelity bonds, NCUA-2026-1883 for incidental powers, and NCUA-2026-1889 for the CLF.
The NCUA deregulation package would reduce specified procedural and filing requirements. Fidelity bond protection, approval of new incidental-powers activities, and the CLF’s lending framework would continue under the provisions the proposals retain.
Prepared with AI assistance; claims checked against NCUA’s announcement and the proposed rule texts.