NCUA plans for succession plan requirements

A few weeks ago, the National Credit Union Administration (NCUA) Board held its January 2022 monthly meeting. During the meeting, the Board approved a proposed rule that, if adopted as a final rule, would require Federal Credit Unions (FCUs) to create succession plans for filling certain positions to ensure continuity of operations. Let’s review this rule and how it would affect the credit union industry:

Which credit unions would be subject to the rule?

The proposed rule, if adopted as a final rule, would apply to all FCUs, regardless of asset size. The rule specifically notes that the rule would not apply to federally-insured state-chartered credit unions (FISCUs). However, the proposed rule notes that FISCUs may be required to comply with state-level requirements on the topic of succession planning, and the NCUA board encourages FISCUs to “undertake succession planning efforts” to the extent compatible with state law. Additionally, the proposed rule notes that it would not apply to corporate credit unions covered by Part 704 of the NCUA regulations, as those rules already address succession planning.

 

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