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This podcast provides you the ability to listen to new regulatory guidance issued by the National Credit Union Administration, and occasionally the F D I C, the O C C, the F F I E C, or the C F P B. We will focus on new and material agency guidance, and historically important and still active guidance from past years that NCUA cites in examinations or conversations. This podcast is educational only and is not legal advice. We are sponsored by Credit Union Exam Solutions Incorporated. We also have another podcast called With Flying Colors where we provide tips for achieving success with the N C U A examination process and discuss hot topics that impact your credit union.
Samantha: Hello, this is Samantha Shares.
This episode covers the
2025 N C U A Annual Report,
published on April 1st, 2026.
The following is an audio
version of that document.
This podcast is educational
and is not legal advice.
We are sponsored by Credit Union
Exam Solutions Incorporated, whose
team has over two hundred and
forty years of National Credit
Union Administration experience.
We assist our clients with N C
U A so they save time and money.
If you are worried about a recent,
upcoming, or in process N C U A
examination, reach out to learn how they
can assist at Mark Treichel dot com.
Also check out our other podcast called
With Flying Colors where we provide tips
on how to achieve success with N C U A.
Because the Annual Report is nearly two
hundred pages and contains extensive
charts, tables, and audited financial
statements, this episode takes a different
approach than our usual read-aloud.
For each major section, we provide
a short summary and then share a few
key passages in N C U A's own words,
so you can hear directly what the
agency and the Inspector General said.
And now, the document.
We begin with the Message
from the Chairman.
Chairman Kyle S.
Hauptman opens the report by noting
that each of N C U A's four funds
received an unmodified, or clean, audit
opinion with no material weaknesses,
and that the credit union system
overall remained strong in 2025.
He then describes four major themes
that defined the year: agency
reorganization, implementation of
the G E N I U S Act, changes to the
exam and supervision program, and
a broad deregulatory initiative.
In his own words:
Quote.
Although N C U A continues to closely
monitor some indicators of potential
stresses on credit union performance,
including an increase in loan portfolio
delinquencies, the credit union system
overall remained strong in 2025.
The Share Insurance Fund, which
provides insurance coverage of up to two
hundred and fifty thousand dollars for
individual accounts at federally insured
credit unions, and the credit union
system remained well-capitalized with
sufficient liquidity throughout 2025.
End quote.
On the reorganization, the
Chairman states: Quote.
N C U A conducted a baseline review
of its organizational structure
as of January 20th, 2025, and
established workforce reduction
and structural realignment goals.
By the end of 2025, the agency achieved
a 23 percent reduction in headcount
through a voluntary separation program.
End quote.
On the G E N I U S Act, which
became law on July 18th, 2025,
the Chairman says: Quote.
N C U A views implementation of the
G E N I U S Act as a significant
opportunity for the future of the credit
union movement and this focus will
remain central to our work in 2026.
End quote.
On supervision, the Chairman explains that
the agency revised its Document Request
List processes, extended the exam cycle
so that the time between completion and
start date for exams of some well-run
credit unions could be 24 months,
ceased using or referring to reputation
risk consistent with Executive Order
14331, and discontinued the practice of
assigning ratings to the Risk Categories.
He also published what he calls
a No Regulation-by-Enforcement
policy statement.
In his words: Quote.
N C U A enforcement actions shall only
occur in the case of clear or significant
violations of law or regulation.
End quote.
He also highlights three new federal
credit union charters issued in 2025:
Heritage Hub Federal Credit Union
in Houston, Texas; African Diaspora
Federal Credit Union in Saint Louis,
Missouri; and Haven Federal Credit
Union in Santa Clara, California.
And he notes that Valwood Park Federal
Credit Union in Carrollton, Texas
was released from conservatorship.
Next we turn to the Management's
Discussion and Analysis section, which
provides a year-in-review of the credit
union system and N C U A's activities.
The report emphasizes that the system
remained strong: credit union membership
grew to more than one hundred forty-four
point seven million members, assets
in the credit union system increased
to two point four three trillion
dollars, and the system's aggregate
net worth ratio stood at 11.31
percent, well above the seven
percent statutory threshold for
being considered well-capitalized.
On the examination program, the report
describes a risk-focused process
tailored by size and risk profile.
For most small federal credit unions
with less than 50 million dollars in
total assets and C A M E L S ratings
of 1, 2, or 3, N C U A follows its
Small Credit Union Examination Program.
Large credit unions with more than
15 billion dollars in total assets
are supervised by the Office of
National Examinations and Supervision,
known as O N E S, using a continuous
supervision model with enhanced
offsite monitoring and data analysis.
These large institutions also
undergo annual stress tests.
On credit union failures,
the report states: Quote.
There were six credit
union failures in 2025.
The cost of these failures, or
the estimated cost of resolution
at the time of failure, was 24.0
million dollars.
The Share Insurance Fund remains
financially strong and has
sufficient equity and reserves
to cover anticipated losses.
End quote.
On enforcement: Quote.
The number of total outstanding
enforcement actions for federally insured
credit unions decreased from 153 at the
end of 2024, to 139 at the end of 2025.
In 2025, N C U A issued administrative
actions prohibiting 27 individuals from
participating in the affairs of any
federally insured financial institution,
compared to 24 issued in 2024.
End quote.
On consumer protection: Quote.
In 2025, N C U A's Office of Consumer
Financial Protection spent 8,520 hours
examining 57 credit unions for compliance
with fair lending laws and regulations.
In 2025, the Consumer Assistance Center
handled 48,936 written complaints,
inquiries, and telephone calls from
consumers and recorded over 1.4
million dollars in monetary
benefits for complainants.
End quote.
On small, low-income, and new
credit unions, the report notes
that small credit unions, defined
as those with less than 100 million
dollars in assets, made up 58.6
percent of all federally
insured credit unions.
These 2,514 credit unions had 6.6
million members and held more than 75.6
billion dollars in
assets at year-end 2025.
There were 2,390 low-income designated
credit unions, representing 55.7
percent of all federally
insured credit unions.
The 2025 Community Development Revolving
Loan Fund grant round included six
initiatives, ranging from Impact
Through Innovation with a maximum
award of one hundred thousand dollars
down to Training grants with a maximum
award of twenty-five thousand dollars.
On the deregulation initiative: Quote.
Announced in 2025, N C U A's
Deregulation Project is a long-term
effort that involves a comprehensive
review of N C U A's regulations.
The initial focus of this project is
to revise or remove any regulations
that are obsolete, duplicative, overly
prescriptive, or unduly burdensome.
End quote.
On the workforce: Quote.
N C U A will continue to meet its core
mission and support the administration's
priorities by simplifying policies,
refining processes, aligning staff
with strategic priorities, and
modernizing tools and technology to
support N C U A's long-term success.
End quote.
The report notes the agency
expects to have fewer than one
thousand staff heading into 2026.
We now turn to the Financial
Highlights, which summarize the
four funds N C U A administers.
These are the Share Insurance Fund,
the N C U A Operating Fund, the Central
Liquidity Facility, and the Community
Development Revolving Loan Fund.
Each received a clean audit opinion.
The report notes that the Share
Insurance Fund, often referred to as
the N C U S I F, insured 4,298 credit
unions as of December 31st, 2025, with
insured member shares reaching 1.86
trillion dollars.
Share Insurance Fund
total assets were 24.1
billion dollars and net position was 23.9
billion dollars, an increase of 1.8
billion dollars from 2024.
The equity ratio was 1.30
percent, below the established
Normal Operating Level of 1.33
percent, so the N C U A Board did
not declare or pay a distribution
to insured credit unions this year.
On investment income: Quote.
N C U A invested its capitalization
deposits collected from all member
credit unions in U S Treasury securities
and earned interest revenue of 632.1
million dollars in 2025,
an increase of 67.1
million dollars from 2024.
The average interest rate
earned for the year ending on
December 31st, 2025 was 2.70
percent.
End quote.
For the Operating Fund, the report
notes total revenues of 151.6
million dollars and
total expenses of 160.7
million dollars, with employee related
costs being the primary driver.
Fund balance ended at 100.3
million dollars.
The report also notes: Quote.
In 2025, N C U A obligated 400.0
million dollars of its operating budget;
of this amount, N C U A spent 383.6
million dollars.
This amount spent was 7.6
percent less than the Board-approved
level for the year, due to targeted
contract cost reductions and reduced
travel and administrative costs.
End quote.
For the Central Liquidity Facility,
or C L F, the report states: Quote.
As of December 31st, 2025, the C L F
had 453 members that contributed 892.2
million dollars of capital stock.
Total members' equity was 940.7
million dollars as of December
31st, 2025, an increase of 12.0
million dollars from 2024.
Net income for the year ended
December 31st, 2025, was 36.9
million dollars.
End quote.
The report also notes the C L F
had no lending activity in 2025.
For the Community Development
Revolving Loan Fund, the only N C
U A fund that receives an annual
appropriation from Congress, the
report notes a fund balance of 20.4
million dollars, and states: Quote.
In 2025, Congress enacted
multi-year appropriations of 3.47
million dollars for the
technical assistance program,
in the same amount as in 2024.
The fund awarded 10 technical
assistance grants totaling 0.4
million dollars.
End quote.
We now move to the
Performance Results section.
N C U A had three strategic goals
in 2025, supported by ten strategic
objectives, sixteen performance goals,
and twenty-six performance indicators.
The agency met or exceeded 17
of 26 performance indicators.
The report explains the context
behind the results: Quote.
The N C U A Board approved the agency's
2025 Annual Performance Plan on January
16th, 2025, at the end of the prior
presidential administration and under
the leadership of then Chairman Harper.
After the start of the current
administration, newly named Chairman
Hauptman led the agency through
a period of historic change.
Over the course of the year, the agency
adjusted its priorities and programs to
comply with the administration's Executive
Orders and other policy directions.
While some of the performance goals
adopted in early 2025 aligned with the
current administration's efforts, it was
not possible to achieve others because of
refocused resources or reprioritized work.
End quote.
Under Strategic Goal 1, ensuring a
safe, sound, and viable system of
cooperative credit, the agency started
examinations for 98 percent of credit
unions within agency timelines and
started follow-up examinations for
100 percent of federal credit unions
with assets greater than 500 million
dollars and a C A M E L S composite
3 rating within required timelines.
Post-examination survey responses
were positive at 97 percent.
The agency completed 57 fair lending
examinations against a target of 60.
A framework for an enhanced
consumer compliance framework
for complex credit unions was not
achieved; the report states: Quote.
In 2025, the resources initially assigned
to develop the framework were reallocated
to higher priority initiatives.
End quote.
Information security reviews were
completed in 99 percent of examinations.
On financial technology and
digital assets, the agency did not
complete a formal barrier analysis,
but the report states: Quote.
The agency made significant progress
in 2025 to develop regulations required
under the G E N I U S Act, which will
provide a framework for the use of payment
stablecoins in the credit union industry.
End quote.
Under Strategic Goal 2, improving
financial well-being, the agency
approved 54 underserved area
expansions against a target of 40.
It did not identify three financial
deserts; the report states: Quote.
In 2025, N C U A discontinued efforts
to identify specific financial
deserts and reallocated the project's
resources to programs focused on
emerging financial technologies.
End quote.
The agency exceeded its M D I
preservation target, reporting: Quote.
Membership in M D I-designated credit
unions increased to approximately 7.0
million in 2025 from approximately 6.5
million in 2024.
The total number of M D I-designated
credit unions also increased to
450 in 2025 from 407 in 2024, an
increase of approximately 10.6
percent.
End quote.
C D R L F grant applications came in
at 238, below the 5 percent increase
target, but the report notes the program
received 10 percent more applications
from first-time applicants and twice as
many re-applications from credit unions
that had previously not received an award.
Under Strategic Goal 3, maximizing
organizational performance, the
agency met five of seven indicators.
Employee development programs scored 4.6
out of 5 on satisfaction.
The Federal Employee Viewpoint
Survey, or F E V S, engagement
index was not measured because the
U S Office of Personnel Management
did not administer F E V S in 2025.
N C U A maintained an overall F I
S M A maturity rating of Level 4,
Managed and Measurable, and awarded
85 percent of total eligible contract
dollars as competitive actions.
On Office of Inspector General
recommendations, the report states: Quote.
N C U A completed corrective
actions on six of eleven O I G audit
recommendations with completion dates
in 2025, missing the 90 percent target.
End quote.
All financial statement audits
received unmodified opinions.
We now turn to the Other Information
section, which includes the
Inspector General's assessment of
the top management and performance
challenges facing N C U A in 2026.
Acting Inspector General Marta Erceg
identified five top challenges:
Balance Sheet Management; Redefining
Regulatory and Supervisory Approaches;
Cybersecurity, Protecting Systems and
Data; Implementation of Artificial
Intelligence; and Agency Realignment.
On Balance Sheet Management, the
Inspector General writes: Quote.
The Federal Reserve's most recent
Federal Open Market Committee statement
indicated that inflation remains somewhat
elevated and that uncertainty about
the economic outlook remains elevated.
Consistent with this economic
environment, the N C U A identified
balance sheet management as one of
its supervisory priorities for 2026.
It noted that elevated funding
costs, asset quality challenges, and
structural liquidity constraints affect
earnings and balance sheet resilience.
End quote.
On Redefining Regulatory and
Supervisory Approaches: Quote.
The N C U A has proposed changing
or removing regulations that are
obsolete, duplicative of statutory
requirements, intended to serve
as guidance, not requirements, or
overly burdensome, to align with
Executive Order 14192, Unleashing
Prosperity through Deregulation.
As far as new regulations, the N C
U A will issue a new regulation to
implement the Guiding and Establishing
National Innovation for U S Stablecoins
Act, which requires financial
regulators to issue implementing
regulations for financial institutions'
participation in the stablecoin market.
End quote.
On Cybersecurity: Quote.
Cybersecurity risks continue to remain a
significant, persistent, and ever-changing
threat to the financial sector.
Credit unions' growing reliance on
increasingly complex technology-related
operating environments exposes the credit
union system to escalating cyberattacks.
The prevalence of malware, ransomware,
distributed denial of service attacks, and
other forms of cyberattacks have caused
challenges at credit unions of all sizes.
End quote.
The Inspector General notes the O I
G's 2026 Annual Work Plan includes
two cybersecurity audits, one on
ransomware readiness and one on
whether N C U A's information security
examination program adequately
assessed credit unions' programs.
On Implementation of Artificial
Intelligence, the Inspector
General writes: Quote.
To reduce costs and improve
efficiencies, a growing number of
financial firms are using A I for tasks
such as fraud prevention, customer
service, and credit underwriting.
However, the use of A I also introduces
potential risks such as safety and
soundness and consumer compliance risk.
End quote.
The Inspector General adds: Quote.
The N C U A should consider whether there
are issues limiting the use of A I, such
as an insufficient number of employees
with specialized A I skills, concerns
about risk management and data privacy,
limited transparency from vendors on how
they use A I, the cost of new technology,
and the reliability of A I tools.
End quote.
The report notes that in February 2026,
N C U A issued an instruction with its
A I policy governing agency use of A I.
On Agency Realignment: Quote.
Through the voluntary separation
program, the agency reduced the number
of employees by approximately 23 percent.
The N C U A is redefining operations
by simplifying policies, refining
processes, aligning staff with
strategic priorities, and modernizing
tools and technologies to enable
operational effectiveness and resources
to meet statutory responsibilities.
With the reduced workforce, the
agency should continue to manage
its exposure to risk and prioritize
strengthening capabilities to
continue to meet its mission.
End quote.
The Other Information section also notes
that N C U A's risk assessments under
the Payment Integrity Information Act
have consistently indicated that none
of the agency's programs are susceptible
to significant improper payments.
The next risk assessment is
scheduled for completion in 2026.
We close with a quick look at
the Statistical Data section.
As of the fourth quarter of 2025, there
were 4,287 federally insured credit
unions, down 168 from a year earlier.
Total members grew to 144.7
million.
Total assets reached 2.43
trillion dollars, up 5.4
percent.
Total loans reached 1.72
trillion dollars, up 4.6
percent.
Total deposits reached 2.07
trillion dollars, up 5.5
percent.
The net worth ratio stood at 11.26
percent.
Return on average assets was 0.79
percent.
The loan-to-share ratio was 83.2
percent.
The total delinquency rate was 1.03
percent, up 5 basis points
from a year earlier.
Net charge-offs were 13.2
billion dollars, or 0.78
percent of average loans.
Looking at performance by credit
union type: federal credit
unions numbered 2,686 with 1.26
trillion dollars in assets.
Federally insured state-chartered
credit unions numbered 1,601 with 1.17
trillion dollars in assets.
Small credit unions, those under 100
million dollars, numbered 2,514 with 75.6
billion dollars in assets.
Complex credit unions, those with
more than 500 million dollars in
assets, numbered 739 and held 2.12
trillion dollars, the bulk
of the system's assets.
Credit unions with a low-income
designation numbered 2,390 and held 1.32
trillion dollars.
Minority depository institutions
numbered 450 and held 100.6
billion dollars.
Finally, the report includes
an Appendix with biographical
information on Chairman Kyle S.
Hauptman, senior staff, and a
description of each N C U A office.
The Chairman was designated as
the thirteenth Chairman of the N
C U A Board by President Donald J.
Trump on January 20th, 2025.
He previously served as Vice Chairman from
December 2020 to January 2025, and before
joining the Board he was an advisor on
economic policy to Senator Tom Cotton.
That concludes our summary of the 2025
N C U A Annual Report, along with the
key passages in the agency's own words.
This concludes the document.
If your credit union could use assistance
with your exam, reach out to Mark Treichel
on LinkedIn or at Mark Treichel dot com.
This is Samantha Shares, and
we thank you for listening.