By Ray Birch
ALEXANDRIA, Va.—NCUA has responded to CUToday.info regarding its intentions to enforce its succession planning rule beginning in January. But the agency’s carefully worded reply, although referencing examiner enforcement, may be raising more questions than providing answers for some.
Some industry voices say the answer is vague at best, even a dodge, while others see it as confirmation the rule will move forward despite political headwinds. At issue is whether President Trump’s executive order pausing Biden-era regulations would delay the controversial proposal, which many credit unions—particularly smaller ones—have criticized as burdensome and ineffective.
NCUA’s statement to CUToday.info stops short of addressing the executive order directly, but notes that once the new rule takes effect, examiners “will enforce the succession planning rule as part of the exam process as appropriate.” For some, that reads as a green light for January enforcement. For others, the language leaves open the possibility the rule could still be amended—or even delayed—at a future board meeting.
That ambiguity may not be accidental. With only one sitting board member, Chairman Kyle Hauptman, the NCUA faces legal questions over what actions it can legitimately take. Regulatory changes or amendments adopted under a one-person board could be subject to challenge, leaving credit unions to navigate an uncertain compliance path.
Trump’s Executive Order Creates Added Confusion
On his first day back in office, Jan. 20, 2025, President Trump issued Executive Order 14148, rescinding numerous Biden-era directives and imposing a government-wide regulatory freeze. The order instructed agencies to halt pending rulemakings, withdraw unpublished rules, and delay effective dates of existing rules by 60 days.
That directive left credit unions questioning whether the succession planning rule—finalized in late 2024 but not set to take effect until Jan. 1, 2026—was covered by the freeze. CUToday.info posed the question to the agency, noting credit unions were looking for clarity on whether they should prepare for compliance.
NCUA, in an email message, replied: “To clarify, the Presidential Memorandum imposing a Regulatory Freeze Pending Review doesn’t state that rules already published in the Federal Register will be ‘delayed from becoming effective until further notice.’ It does say in Paragraph 3 to consider postponing for 60 days and during that time to consider opening a comment period, which the NCUA did from April 23rd – June 23rd, 2025.
“Once the rule goes into effect examiners will continue to conduct risk-focused exams and we will enforce the succession planning rule as part of that exam process as appropriate.”
CUToday.info followed up with the agency, noting it would report that NCUA intends to enforce the rule in January unless the agency clarified otherwise. NCUA offered no further response.
Industry Leaders See Contradictions
Brandy Bruyere, partner at Honigman LLP, underscored the legal gray area around a one-member board making significant regulatory decisions.
“Questions remain about whether actions, such as finalizing rule amendments, are legally valid under a single-person board structure—an area that is largely untested,” she noted. “There’s also significant legal debate over what Chairman Hauptman can and cannot do as a one-member board. Questions remain about whether actions such as finalizing rule amendments are legally valid under a single-person board structure—an area that is largely untested. Ultimately, it may come down to whether any decision prompts someone to spend the time and money to challenge it in court.”
Bruyere asked if the rule, for example, was scaled back or its effective date delayed by a year while the NCUA considers additional comments, would anyone actually sue over that.
“Those are the kinds of uncertainties at play,” she said.
Bruyere pointed out an executive order is not law in and of itself, but rather more of a policy statement that directs federal agencies on how to proceed.
“An executive order on its own does not delete a regulation,” she reminded. “The NCUA followed the EO by seeking additional comments on the succession planning rule, and the comment period ended back in late June. It is possible an amendment will be on the agenda for one of the last NCUA board meetings of the year, but the challenge for credit unions is that as of now, there is a looming deadline that would take time to implement with no clear regulatory change pending.”
She noted that credit unions might start some of the work to come into compliance only for there to be a delay or even future amendment to the rule that makes the requirements more flexible.
“Others may roll the dice and hope one of the next board meetings addresses the issue,” Bruyere said. “In the past, we’ve seen the NCUA take an approach when examining for compliance with a new rule that looks for good faith efforts. A credit union taking steps with regard to succession planning that meet general fiduciary duties as officers of the credit union should be in a much better position should the NCUA not take steps to delay, amend, or revoke this rule and could possibly be viewed as at least partial compliance depending on how the NCUA decides to proceed.”
Bruyere, however, pointed out the NCUA response to CUToday.info’s question does address enforcing the rule—a key statement.
Credit Union Concerns Over Burden
The succession planning rule requires federally insured credit unions to adopt written succession plans, approved by their boards, that are consistent with each institution’s size and complexity. Hauptman, who had joined then Chairman Todd Harper in voting in favor of the succession planning rule when it was first proposed in January 2022 over the objection of then Board Member Rodney Hood, voted against the measure when it was finalized with a 2-1 vote in December 2024, citing disproportionate burdens on small institutions. Former Board Members Todd Harper and Tanya Otsuka voted in favor of the proposal.
Longtime industry voice Pat Jury, former president of the Iowa Credit Union League, former CUNA chairman, and now a partner at Jury & Lass, said the rule misses the mark. He emphasized that while succession planning is important, NCUA should allow flexible, guidance-based support rather than prescriptive mandates.
Jury also noted that bank regulators offer guidance rather than rules, and any federal approach should align with state frameworks rather than duplicate or conflict with them.
Jury added that succession planning is only one factor in mergers, with rising costs, regulatory pressures, and staffing shortages playing larger roles. He urged the NCUA to focus on providing practical tools—such as best practices, sample plans, and leadership development resources—rather than adding compliance hurdles.
America’s Credit Unions CEO Jim Nussle went further, calling for rescission of the rule altogether.
"The NCUA's succession planning rule as it currently stands would create unnecessary burdens on credit unions and be particularly harmful for small credit unions,” Nussle said. “It does not solve the problems it set out to address. America's Credit Unions has raised these concerns throughout the rulemaking process, and we have urged the NCUA to rescind the rule and work with the credit union industry to identify a more appropriate solution to the problem.
“The NCUA's request for comment on the rule is consistent with the President's memorandum,” continued Nussle. “It is clearly one that raises questions of policy and the NCUA should work with the Office of Management and Budget to rescind the rule, while also providing clear guidance to credit unions to delay its current effective date."
The Defense Credit Union Council, meanwhile, struck a more nuanced tone, stating that many of its members believe the rule will be enforced in January.
“Succession planning is an important part of ensuring leadership continuity in credit unions, and we support efforts to encourage sound governance,” stated DCUC Chief Advocacy Officer Jason Stverak. “As the NCUA moves toward implementing its succession planning rule, we would encourage Chairman Hauptman to carefully consider the practical impact on credit unions of different sizes and complexities. Many credit unions already engage in succession planning as part of their ongoing governance practices, and any regulatory approach should recognize that reality. A balanced path forward will ensure that succession planning strengthens credit unions without creating unnecessary burdens, allowing them to remain focused on serving their members.”
Some Already Complying
For credit unions like the $761-million SeaComm FCU in Massena, N.Y., the rule’s requirements pose little challenge.
“SeaComm has already been meeting the requirements of the new rule,” CEO Scott Wilson told CUToday.info. “We have had a very thorough succession planning process that is in place currently and works. It has extensive documentation attached to it for all critical positions, including executive, management and certain staff job functions, along with a formal written report provided annually to the board to keep them apprised of our plans— all of which has been in place for more than a decade. An organization of our size and complexity truly requires us to be proactive for planned and unplanned vacancies. Our formal process over the years has enabled us to be prepared when a position becomes open. It works extremely well for us.”
But Bruyere warned that for others, uncertainty is the bigger risk.
“Right now, we’re in a wait-and-see mode to find out what appears on the September board meeting agenda,” she said. “If this issue isn’t included, credit unions may not get clarity until late October or even November. Credit unions are in a position where, if they don’t at least begin preparing to comply, they risk missing the deadline and falling out of compliance. Simply kicking the can down the road isn’t an option.”
Dollar: Statement Confirms January Enforcement
Former NCUA Chairman Dennis Dollar believes the agency’s statement to CUToday.info confirms, in his reading, that the rule will be enforced as scheduled.
“I have been reading NCUA-speak for over thirty years, even having written a bit of it during my days there. When they speak of how examiners are going to approach a regulation at exam time, there is little ambiguity as I see it,” stated the principal partner at Dollar Associates in Birmingham, Ala. “They have essentially announced that they are going to let the rule go into effect and enforce it.
“I am glad NCUA has gone ahead and answered the many questions credit unions have about the succession planning rule by announcing that it will go into effect as scheduled in January 2026 and be enforced through the examination process,” continued Dollar. “Although I have opposed the rule from the beginning as an unnecessary federal agency overreach into what should be the fiduciary responsibility of elected credit union boards of directors and their executive teams, credit unions needed to know whether to plan for the rule or not.”
Dollar observed that many political experts have predicted that Hauptman would at least delay, if not indefinitely postpone, the effective date of the rule as have most Trump-appointed agency heads with not-yet-effective Biden-era rules.
“However, Chairman Hauptman is a very independent minded agency head and has shown throughout his tenure to be quite bipartisan in his approach,” Dollar said. “He doesn’t just jump in line with other regulators repealing rules and guidance like the CFPB and OCC have done with their Trump appointed agency heads. As a one-member board, although he could do so by precedent, he has been much more cautious not knowing how the board composition is going to eventually shake out."
Will Harper and Otsuka eventually come back by a judicial decision? Will President Trump nominate two new board members? Dollar asked.
"And let’s not forget that Chairman Hauptman is now a holdover himself as his term officially expired in August 2025. There’s a lot of uncertainty there,” stated Dollar. “So, the longer it went without an announcement that the rule would be postponed, the more likely it began to seem, from my perspective, that the rule would be allowed to go into effect and enforced.”
Dollar added that no one believes credit unions should not have a solid approach to succession planning.
“That is not the issue,” he said. “The question is whether it requires an enforceable rule with examiner discretion, absent a safety and soundness reason, to interfere with what is clearly a board’s fiduciary decision. Guidance maybe. A Letter to Credit Unions perhaps. But an enforceable rule is, in my view, overreach.”
Dollar asserted that many on the NCUA staff have long wanted—even going back to his days as chairman—such a rule as a means to have a check and balance in the executive hiring, recruiting, pay and benefits of credit union executives.
“We kept such a rule at bay as unnecessary, absent a safety and soundness issue,” he said. “This succession planning rule gives them, over time, that potential hammer by having the power to write up a credit union’s board for the agency’s disagreement with their executive hiring and compensation decisions.”
Dollar said he thinks there has likely been a lot of behind-the-scenes debate within the agency as to whether their desire to put the rule into effect or their concern about the President’s executive order would prevail.
“But regulators usually come down on the side of regulation,” he said.
While Dollar reiterated he disagrees with the rule and feels it has the potential for tremendous abuse and overreach—as he said many regulations do over time—it is important that credit unions know what to expect as to whether the rule would be enforced or not.
“NCUA answered that question in its response to CUToday, and I commend them for getting the answer credit unions need. It is good that credit unions now know to expect much more examiner scrutiny over not just their succession planning policy—but their executive hiring decisions as well,” concluded Dollar. “Uncertainty over whether a regulation will be enforced is not good for credit union strategic planning and compliance efforts. The NCUA, in our view and even though I disagree with the rule, cleared that up with its statement to CUToday. Now we know.”