By Scott Simpson
Most credit union stories do not begin in a boardroom. They begin at a kitchen table, with a family trying to make sense of a mortgage payment, a car repair, or a small business idea. Credit unions exist for those moments. And that is why the rules that govern them matter.
When regulation is thoughtful, credit unions can focus on serving members, making these life goals and daily needs a reality. When regulation is outdated or duplicative, it pulls time and resources away from the very people the system is meant to protect.
The NCUA is in the early stages of a targeted regulatory relief effort in response to President Trump’s executive order on deregulation. The directive is straightforward and long overdue: Take a hard look at existing regulations and identify where outdated, duplicative, or unnecessary requirements can be streamlined without compromising safety, soundness, or resilience.
That balance is important. Credit unions have long asked for a regulatory framework that recognizes who they are, how they operate, and whom they serve. They’re not asking for a free pass, but a right-sized approach to regulatory oversight.
Rooted In Main Street
Credit unions are not financial conglomerates serving Wall Street. They are member-owned cooperatives rooted in Main Street. When compliance costs rise, those costs do not disappear into thin air. They often result in fewer resources for small business lending, financial counseling, branch access, and innovation that helps American families navigate an increasingly complex economic world.
Unlike big banks, credit unions do not raise capital on Wall Street. They build it slowly, dollar by dollar, by retaining earnings. That means every unnecessary compliance dollar doesn’t just disappear into paperwork. It directly limits what credit unions can do for their members. Because of capital requirements, roughly every dollar diverted to duplicative regulation is ten dollars that cannot be turned into a loan for a family, a small business, or a first-time homebuyer. When regulation grows without clear benefit, communities pay the price.
I applaud the NCUA for approaching this effort with transparency and intention. Chairman Kyle Hauptman is recognizing something credit unions have long understood. Guidance layered on top of guidance eventually becomes clutter, and clutter creates confusion. It’s why America’s Credit Unions and our league partners have been steadfast advocates to make sure credit unions are not unnecessarily buried under unnecessary red tape that doesn’t reflect their operational reality.
Together, the NCUA’s first and second rounds of proposals focus on eight practical areas where regulation can be clearer, lighter, and more effective. They include modernizing supervisory committee audit and verification rules to remove outdated and duplicative requirements, moving guidance on data breach response programs and safeguarding member information out of formal regulations to reduce confusion, and updating corporate credit union governance and reporting mandates that no longer reflect how institutions operate today.
The proposals also address surety and guarantor requirements by removing obsolete language, eliminating regulatory limits on loans to other credit unions that already exist in statute, streamlining catastrophic act reporting so institutions can focus on recovery and member service, and updating overly prescriptive advertising and insured-status notice rules while preserving clear consumer disclosures.
Taken together, these changes do not weaken oversight. They strengthen it by aligning regulatory expectations with real-world operations and risk.
A Recalibration
This kind of recalibration makes a difference. Credit unions have earned the trust of more than 145 million Americans by staying focused on people rather than profit. At a time when confidence in large institutions is strained, credit unions continue to serve as steady financial partners for families, small businesses, and local communities. Every hour spent navigating unnecessary regulatory complexity is an hour not spent serving those who need credit unions the most.
Regulatory relief works best when it is rooted in pragmatism, not ideology. Strong rules should safeguard the system while remaining clear and workable. When regulators thoughtfully distinguish between what is truly necessary and what is merely a legacy of earlier eras, the result is a safer, more effective system that better serves the public.
America’s Credit Unions will continue gathering feedback from our members, providing formal comments, and working constructively with the NCUA to ensure their proposals strike the right balance.
We’re grateful the NCUA recognizes that easing outdated or duplicative requirements doesn’t weaken the system; it helps protect it. When credit unions can focus less on unnecessary compliance and more on serving their members, the foundation of cooperative finance grows stronger. American families grow stronger. Good regulation should be firm where it needs to be and flexible where it can be, always in the service of people, not paperwork. This effort moves us in that direction, and for credit unions and the members who trust them every day, it’s a welcome step forward.
Scott Simpson is President/CEO of America's Credit Unions.