The National Credit Union Administration (NCUA) board held its final meeting of the year, addressing two key agenda items:

Final Rule – Succession Planning (12 CFR 701 and 741)

The board approved a final rule requiring federally insured credit union (FICU) boards of directors to establish written succession plans. These plans must address specific positions, include required information, and undergo regular review at least every 24 months. Newly appointed board members must familiarize themselves with the plan within six months of appointment.

Key changes based on public comments include:

• Scope Reduction: Loan officers, credit committee members, and supervisory committee members were removed from the list of covered positions.
• Simplified Requirements: Succession plans no longer need to document deviations in board meeting minutes.
• Extended Timeline: The rule’s effective date is delayed to January 1, 2026, to provide FICUs time to comply.

The California and Nevada Credit Union Leagues submitted a comment letter highlighting many concerns such as the prescriptive nature of the rule, its impact on small credit unions, and the lack of clear diversity definitions. In response to feedback, the NCUA acknowledged the need for flexibility, allowing credit unions to tailor plans to their unique governance structures and operational needs.

To assist smaller credit unions, the NCUA has released a sample succession planning template.

NCUA 2025-2026 Budget

The board unanimously approved the Operating, Capital, and National Credit Union Share Insurance Fund administrative budgets for 2025 and 2026.

2025 Budget Highlights

• Total budget: $395.4 million (a $37.7 million reduction from the draft proposal).
• Staff positions: 1,255 (six fewer than the draft proposal).
• Operating fee: 1.2% lower than proposed.

2026 Budget Highlights

• Total budget: $419.5 million (a $49 million reduction from the draft proposal).
• Staff positions: 1,263 (nine fewer than the draft proposal).

Despite changes, Chair Todd Harper announced that the budget includes a new climate financial risk officer position. This role will:

• Help credit unions monitor and mitigate climate-related financial risks.
• Update the NCUA’s disaster preparedness guidance.
• Develop training for examiners on lending risks tied to solar panels and electric vehicles.

The Leagues submitted a comment letter expressing concerns about the staff draft budget, particularly regarding the creation of the climate risk officer position.