The NCUA today announced the tenth round of proposed regulatory changes under its ongoing Deregulation Project. This initiative is part of a continued effort to review existing regulations and ensure they remain focused on promoting credit unions’ safety, soundness, and long-term resilience.

As part of this latest round, the NCUA is seeking public comment on a proposal to clarify agency guidance and streamline requirements related to bank conversions and mergers. Specifically, the proposal would eliminate duplicative and unnecessarily burdensome provisions within the Code of Federal Regulations.

These changes aim to provide greater flexibility for credit union boards of directors, allowing them to exercise their fiduciary responsibilities and business judgment without being constrained by a rigid, agency-defined process.

The proposal includes:

Bank Conversions and Mergers – Merger of Insured Credit Unions into Banks – 12 CFR 12 CFR 708 A Subpart C

• Change 1: Remove the definition of “clear and conspicuous” from 12 CFR 708a.301.
  • Impact on credit unions: Removing this definition will allow credit unions the flexibility to design disclosures that are effective and clear for their members.
• Change 2: Revise the newspaper publishing requirement in 12 CFR 708a.303(b)(1).
  • Impact on credit unions: This proposal would eliminate an outdated and possibly costly requirement. It would also make pre-board-vote notices more accessible to members who can find that information directly on the homepage of the credit union’s website.
• Change 3: Revise the due diligence reporting requirements in 12 CFR 708a.304(d).
  • Impact on credit unions: This proposed change streamlines the reporting requirements, focusing on the substantive outcome of the board’s decision-making process.
• Change 4: Remove highly prescriptive formatting requirements in 12 CFR 708a.305(e)(2).
  • Impact on credit unions: Eliminating these specific formatting rules will reduce administrative burden.
• Change 5: Remove plain language determining factors in 12 CFR 708a.305(f).
  • Impact on credit unions: This proposal would simplify compliance and credit unions would have more flexibility in their merger communications.
• Change 6: Remove “Voting guidelines” from 12 CFR 708a.312.
  • Impact on credit unions: This proposal would remove guidance from regulation so that credit unions aren’t confused about what is required.