Corporate Credit Union Proposed Rule – Updates to ALCO and Reporting Requirements

NCUA has released a proposed rule affecting corporate credit unions that focuses on simplifying governance requirements and removing outdated filing obligations. Although the changes are limited in scope, they reflect a broader regulatory trend toward modernization.

Below is a detailed breakdown of what NCUA is proposing and what it may mean for corporate credit unions and their members.

Understanding the Proposed Rule

The proposal centers on two key changes.

First, NCUA would remove the requirement that a corporate credit union’s Asset and Liability Management Committee (ALCO) include at least one member of the board of directors. The agency believes corporate boards should have full discretion when determining committee membership. Removing this mandate gives boards flexibility to select ALCO members based on expertise and operational needs.

Second, the proposal eliminates the requirement for corporate credit unions to file their annual reports, auditor management letters, and related documents directly with NCUA. Examiners will continue to review these materials as part of the normal exam process, but the separate submission step would be removed. NCUA would also stop posting annual reports publicly and would eliminate the requirement for corporate credit unions to notify the agency when those reports are filed late.

Why NCUA Is Making This Change

These filing requirements date back many years and were designed to provide transparency and enhance oversight during periods of heightened risk in the corporate system. NCUA now believes the direct filing step is unnecessary because examiners routinely review annual reports and management letters during examinations.

Similarly, requiring a board member on ALCO was originally intended to strengthen governance. NCUA now considers the requirement overly prescriptive and believes corporate boards are capable of making structural decisions without a regulatory mandate.

What This Means for Corporate Credit Unions

Corporate credit unions should see a modest reduction in administrative burden. The proposed change does not alter the underlying responsibilities to maintain robust ALCO oversight, risk management processes, or board engagement. But corporate boards regain the flexibility to structure ALCO membership based on skill sets rather than regulatory definitions.

Corporate credit unions will also experience relief from the obligation to submit annual reports and auditor materials outside the normal exam cycle. This reduces duplicative work and allows compliance teams to focus on internal risk management processes.

Practical Steps to Consider

Corporate credit unions may want to begin assessing:

1. Whether ALCO membership would change under the new flexibility

2. Whether internal reporting calendars should be adjusted to reflect the removal of filing requirements

3. Whether website content or disclosures referencing public availability of annual reports need to be updated

4. How to communicate governance changes to stakeholders

Although the proposal is deregulatory, it reinforces NCUA’s expectation that corporate credit unions maintain strong internal oversight structures.

Final Thoughts

NCUA’s proposal is a targeted update focused on improving flexibility and removing outdated steps. The supervisory expectations for risk management, ALCO oversight, and internal reporting remain unchanged.