- This Abrigo article was originally published September 18, 2026 on CUInsight.
Credit union deregulation puts risk oversight in focus
September 25, 2026
0 min read
Why NCUA changes warrant more risk insights for credit union leaders
The NCUA’s recent rule changes to ease regulatory burdens may give credit unions greater flexibility and eliminate unnecessary requirements. But as prescriptive obligations change, more responsibility shifts to credit union management and boards to identify and manage the risks most likely to affect their institutions.
Deregulation efforts: Right-sized and risk-based reviews
Newly sworn-in NCUA Chairman John Crews has said credit unions, most of which are small, “deserve a regulator that respects their resources.” At the same time, he has emphasized that his primary focus will be the safety, soundness, and resilience of the credit union system, backed by risk-based NCUA supervision.
In other words, the NCUA is reducing requirements it considers obsolete, overly burdensome, duplicative, or better handled through guidance while continuing to focus supervision on risks to members, individual institutions, and the National Credit Union Share Insurance Fund.
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The NCUA’s deregulatory effort has covered a broad range of credit union operations. Changes have included reducing the required number of credit union board meetings, eliminating a prescriptive cap on third-party servicing of indirect vehicle loans, and adding flexibility regarding records preservation.
The details of the rule changes differ, but the agency has consistently tied its deregulation project to safety, soundness, and resilience. For example, former Chairman Kyle Hauptman said during the June NCUA board meeting that the agency should avoid telling credit unions how to operate unless material risk is involved.
For credit union leaders, the practical issue, then, is determining which processes remain important to managing those risks as specific regulatory requirements are removed or revised.
“Risks don’t disappear simply because oversight has changed,” says Neekis Hammond, Vice President of Abrigo Advisory Services, who has noted that financial institutions are seeing regulatory easing more broadly. “If anything, risk increases as more pressure is placed on each institution to, in effect, regulate themselves.”
For example, the records-preservation change eliminates a prescriptive list of records, giving credit unions more discretion to decide which operational records to retain and for how long. That shifts more responsibility to management and boards to understand which documents are critical to the institution’s operations, legal obligations, and ability to restore member services after a disruption.
In other areas, too, boards and management teams will need a current view of the risks that could materially affect the institution and its members.
Focus resources on material risks
Credit union leaders can start by identifying the three to five risks most likely to create problems for the institution over the next 12 to 24 months, says Dave Koch, Director of Abrigo Advisory Services.
Those risks will differ by institution. A credit union with significant indirect auto lending exposure may have different concerns than one expanding member business lending. Funding structures, concentrations, member demographics, local economic conditions, staffing, and technology can also influence where management attention is most needed.
For all credit unions, credit risk remains important. The NCUA’s 2026 supervisory priorities noted federally insured credit union loan delinquency and rolling 12-month loss rates had reached their highest levels in more than a decade. Examiners are focusing on underwriting, credit administration, allowances for credit losses, concentrations, and loss mitigation.
Forward-looking analysis can help boards understand how changing economic conditions might affect credit performance, reserves, liquidity, and capital. Historical loss experience is still useful, but it may not capture emerging changes in borrowers’ operating costs, industries, or repayment capacity.
Keep funding and fraud risks in view
Funding and earnings also warrant attention. Credit union leaders should understand which member shares are stable, which are rate-sensitive, and how member behavior could change as rates and competitors’ offers shift.
Scenario analysis can show the potential effects of changes in deposit behavior, loan demand, asset yields, or funding costs. It can also help management identify where balance sheet assumptions will create pressure if conditions develop differently than expected.
Financial crime—particularly fraud—is another ongoing exposure that could pose material risks, so credit union leaders must ensure that smart processes are in place to manage it.
Credit union deregulation may reduce some compliance obligations, but it should also refocus boards and management teams on understanding their credit unions’ unique risk exposures, challenging assumptions, documenting decisions, and responding quickly when conditions change.
Use technology to strengthen risk management amid deregulation
Technology can help manage risk by improving monitoring, centralizing data, and giving management better visibility. It can also help deliver the experience members expect based on what they see elsewhere in the marketplace. In other words, credit unions don’t have to choose between being safe and being fast; technology can help with both.
Credit unions should be able to benefit from increased regulatory flexibility while maintaining safety and soundness. Strong governance, reliable data, and a forward-looking view of unique institution risks can help boards and leaders avoid mistaking fewer requirements for reduced risk exposure.
This blog was written with the assistance of an AI large language model and was reviewed and revised by Abrigo's subject-matter expert.
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Explore 360 ViewFAQs
How does deregulation affect risk oversight at credit unions?
Regulatory changes may give credit unions more flexibility, but they can also shift more responsibility to boards and management to identify and manage risks. Fewer prescriptive requirements do not eliminate the underlying risks.
Which risks should credit unions prioritize?
Credit unions can identify the three to five risks most likely to affect their institution over the next 12 to 24 months. Priorities will vary based on factors such as lending exposure, funding structure, concentrations, member demographics, local economic conditions, staffing, and technology.
How can scenario analysis support credit union risk management?
Scenario analysis can help credit union leaders assess how changes in deposit behavior, loan demand, asset yields, or funding costs could affect the balance sheet. Forward-looking analysis can also help boards understand potential effects on credit performance, reserves, liquidity, and capital.
How can technology help credit unions manage risk?
Technology can improve monitoring, centralize data, and give management better visibility into risk. It can also help credit unions deliver the member experience they expect while maintaining safety and soundness.
The information, content and materials provided through this website are for informational purposes only and are not intended to constitute legal advice. Customers should consult with their legal counsel regarding the application of laws and regulations to their specific circumstances.
About the Author
Mary Ellen Biery
Senior Strategist & Content Manager
Mary Ellen Biery is Senior Strategist & Content Manager at Abrigo, where she combines financial journalism, original research, and SEO/AEO strategy to create authoritative content that helps financial institutions manage risk and pursue growth. A former Dow Jones Newswires equities reporter, her work has appeared in The Wall Street Journal,
