The National Credit Union Administration (NCUA) Board held its June monthly meeting on Thursday, discussing important updates and briefings.
Board Briefing, Regulatory Update. The Board received a staff update on the NCUA’s regulatory work for 2026, focusing on the agency’s multi-year Deregulation Project. Staff noted that the NCUA expects more than 50 rulemaking, guidance, and policy actions across the agency and has already issued 31 proposed rules under phase one of the project. Staff went into detail on several phase one deregulation examples, including advertising requirements, post-election training for new directors, nondiscrimination requirements, and third-party servicing of indirect vehicle loans. Staff also discussed other priority rulemakings and recent final rules, including the interim final rule on federal credit union (FCU) non-interest charges and fees and the final rule prohibiting the use of reputation risk in supervision.
Board Briefing, Share Insurance Fund (SIF) Quarterly Report. The Board was briefed on the latest SIF financial performance. The SIF’s net income for the first quarter was $105 million, a decrease of $8.6 relative to the previous quarter. The Fund’s equity ratio was 1.30 percent at the end of 2025 and is projected to be 1.27 percent when it is calculated at the end of Q2. The percentage of insured shares held by credit unions with a CAMELS code of 3, 4, or 5 slightly decreased during the quarter.
Board Briefing, 2026 Mid-Year Budget Update. The Board received an update on the 2026 budget through May. The NCUA’s total approved budget—and the NCUA’s spending thus far in 2026—is significantly lower than 2025. This is in line with the 2026 total approved budget (including carryover), which reflects a reduction of $70.8 million from 2025. The NCUA has seen a reduction in budget in the three major budget categories: 1. operating budget; 2. capital expenses; and 3. SIF administrative expenses. It is estimated that the 24.7 percent decrease in operating fees in 2026 has generated estimated savings of approximately $14,500 for the average FCU. The NCUA anticipates that the 2026 budget will be within the approved spending budget for 2026.
The Board received an update from Amanda Parkhill, Acting Director of the Office of Examination and Insurance, on the NCUA’s regulatory work for 2026. Staff focused mainly on the agency’s multi-year Deregulation Project, which was launched in response to the President’s “Unleashing Prosperity Through Deregulation” executive order. The NCUA expects more than 50 rulemaking, guidance, and policy actions across the agency. Phase one is focused on rules that may be outdated, duplicative, overly burdensome, or better handled as guidance. Staff described the project as moving from quick wins and burden reduction in 2025 to rulemaking and finalization in 2026. Phase two, beginning in 2027 and beyond, will focus on more complex policy and operational initiatives. The agency has issued 31 proposed rules so far, with 29 under review and two still open for comment.
Staff gave several examples of phase one proposals:
Staff also discussed several rulemakings outside the Deregulation Project. These included stablecoin implementation under the GENIUS Act, the Bank Secrecy Act/anti-money laundering (BSA/AML) program rule, mortgage access work, Call Report streamlining, the FFIEC CAMELS request for information, and federal financial assistance. Comment periods are still open for the FFIEC CAMELS RFI and the stablecoin proposals.
Staff provided details on recent final rules:
Chairman Hauptman expressed support for the Deregulation Project and described it as a “spring cleaning” of the NCUA’s regulations. He highlighted the advertising and third-party servicing proposals as examples of rules that have become too prescriptive. He said the NCUA does not run credit unions and should not tell them how to manage their business unless material risk is involved. He also praised the recent final rules, especially the records preservation rule and the rule prohibiting the use of reputation risk.
In response to Chairman Hauptman’s question about the GENIUS Act, staff said the NCUA is coordinating with other agencies so the necessary rules are in place before permitted payment stablecoin issuers begin operating. Staff said they do not expect credit unions to be behind or at a timing disadvantage. Hauptman also asked how the NCUA handles comments that oppose a proposal. Staff said detailed comments are the most useful and can lead the agency to change a proposal, address concerns through guidance, or leave the existing rule in place.
NCUA staff presented the SIF report for the first quarter of 2026. The SIF earned $105 million in net income during the quarter, down $8 million from year end. Reserves for insurance losses increased by $15 million to $249 million. There were three failures in the first quarter, costing the Fund $5.7 million.
The weighted average life of the SIF’s investment portfolio was 3.6 years, up from 3.2 years at the end of 2025. The weighted average yield as of March 31 was 2.88 percent, which is up 11 basis points from year end.
There were 107 credit unions with a CAMELS code of 4 or 5 at the end of the first quarter, which is 10 fewer than on December 31. The percentage of insured shares held by CAMELS 4/5 credit unions dropped slightly to 0.5 percent. During the quarter, there was also a decrease in CAMELS 3 credit unions from 653 to 636. The percentage of industry insured shares held by CAMELS 3 credit unions fell from 7.8 percent to 7.3 percent.
Chairman Hauptman characterized the SIF as being stable and financially sound. He noted that CAMELS data improved over the quarter, which typically indicates lower future insurance losses, and asked why insurance loss reserves also grew during the quarter. NCUA staff explained that CAMELS data is only one input used to determine reserves. In the first quarter, credit union loan delinquencies increased, which was the primary driver for increased insurance loss reserves.
Agency spending through May 2026 is below the same period in each of the prior three years. The $16 million budget for reorganization projects is not yet spent, but the NCUA plans to obligate much of this budget later this year.
Operating Budget
2026 operating budget spending is 17.1 percent below the same period in 2025. While this figure does not achieve the 20.2 percent spending reduction approved by the Board, the NCUA anticipates that the total 2026 operating budget will meet the approved reduction by the end of the year.
While employee compensation remains the largest spending category, it accounts for the greatest year-over-year reduction. Further, contracted services spending is below 2025 levels despite contracted services obligations being largely incurred in Q1 of 2026. Lower payroll, travel, and contracted services primarily account for the lower 2026 operating budget. Authorized positions have decreased from 1,255 in 2025 to 967 in 2026, which represents a 22.9 percent reduction.
Capital Expenses
Through May 2026, capital spending reflects 30.5 percent of the approved budget at $7.6 million. However, capital spending is expected to increase through procurements and implementation activities. NCUA staff remain confident that capital expenses will meet the 2026 approved capital expenses.
SIF Administrative Expenses
Through May 2026, SIF administrative expenses reflect 70.3 percent of the approved budget at $3.5 million. NCUA staff anticipate that that SIF administrative expenses will meet the 2026 approved SIF administrative expenses.
Chairman Hauptman said he is encouraged by the progress on agency reorganization and capital projects. He asked about the reasons for an increase in 2026 expected funds for laptop refreshes as compared to the approved 2026 budget. NCUA staff pointed to an increase in chip needs for AI and an increase in the price of solid-state drives and CPUs. NCUA staff stated that these additional costs were offset with other reductions.
Chairman Hauptman underscored that the Board-approved operating budget reduction of 20.2 percent compared with 2025 is expected to be met because the funds allocated to contracted services occur early in the year.
Chairman Hauptman inquired about future budget milestones. NCUA staff noted that the next significant deliverable will be the 2027 budget proposal. This proposal will be circulated in a public meeting in October or November of 2026. NCUA staff anticipate that the 2027 budget will be submitted for the Board’s consideration in December 2026. NCUA staff will provide additional 2026 budget execution updates in the fall of 2026, which will reflect updates through—or close to—September 2026. Finally, NCUA staff estimated that there would be a 3 percent budget increase in 2027 resulting from inflation, but staff are confident that inflation costs can be offset by reducing other costs.
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