By Doug Wadsworth
Thursday, as president of the Endangered Small Credit Union Defense (ESCUD), I submitted a formal response letter to the National Credit Union Administration following the agency's Supervisory Priorities Webinar on February 19.
The letter combines appreciation for NCUA's deregulation progress with evidence-based recommendations drawn from recent small credit union surveys.
The webinar outlined NCUA's 2026 supervisory priorities, emphasizing reduced burdens through measures like ending "regulation by enforcement," removing reputational risk from exams, and shortening exam preparation lists. ESCUD's letter applauded these steps while highlighting the need for continued, targeted relief for small institutions.
Representing 27 officially endorsing small credit unions and about 150 informal small CU supporters (online followers), ESCUD incorporated recent survey response data, which ranked the regulatory burden as the second-largest challenge to financial health—behind only competitive pressures—with examiner "over-compliance pressure" and "examination exhaustion" (lengthy exams, excessive teams, and irrelevant checklists) ranking high among top burdens, often comparable to BSA and CECL burdens.
Key points in the letter include gratitude for NCUA's shifts away from over-enforcement and toward flexibility for healthy small credit unions, and calls for greater examiner flexibility, shorter exams at low-risk institutions, reduced over-compliance expectations, and an increased focus on safety/soundness over exhaustive checklists.
By embedding survey charts and results, the letter provided NCUA with a clear, data-driven small CU perspective to inform ongoing deregulation efforts. This submission reflects ESCUD's mission to secure practical exemptions and relief that help preserve hyper-local, member-focused credit unions amid rising compliance burdens, as small credit unions continue to face disproportionate burdens, accelerating mergers and extinctions.
Doug Wadsworth is President of Tri-Cities Community FCU and President of the Endangered Small Credit Union Defense (ESCUD). For more information on ESCUD's priorities, visit www.endangeredsmallCUdefense.org, or contact Doug@Tri-CU.com.