In Likely Farewell, Hauptman Touts Deregulation While NCUA Reports 3 CU Failures That Will Lower Equity Ratio
By CU Today Staff —
ALEXANDRIA, Va.— Three credit union failures cost the NCUA Share Insurance Fund $5.7 million during the first quarter, contributing to higher insurance-loss reserves and a projected decline in the fund's equity ratio, the agency’s staff reported Wednesday.
The update came during what is expected to be Chairman Kyle Hauptman's final board meeting before his anticipated departure from the agency to lead the Public Company Accounting Oversight Board. John Crews, tapped by the Trump Administration to lead NCUA, testifies before the Senate Thursday.
NCUA staff said the Share Insurance Fund nevertheless earned $105.3 million in net income during the quarter and increased total assets to $24.5 billion.
That total assets increase, the agency said, is largely due to $383.4 million in capitalization deposits receivable from credit unions. The fund's reserve balance rose to $249.3 million, an increase of $15.3 million from the prior quarter, reflecting higher estimates for both general and specific insurance-loss reserves.
Looking ahead, NCUA projects the Share Insurance Fund's equity ratio will decline from 1.30% at year-end 2025 to 1.27% as of June 30, 2026.
During a regulatory update, agency staff said the agency remains on track with its sweeping deregulation project, which has already produced 31 proposed rules and is expected to generate more than 50 rulemaking, guidance and policy actions in 2026.
Deputy Director Amanda Parkhill said phase one of the effort, which focuses on eliminating obsolete, duplicative, overly burdensome and guidance-based regulations, is expected to wrap up by late 2026 or early 2027 before the agency moves to a second phase involving more complex changes requiring additional research and planning.
Parkhill emphasized a few proposals may be misunderstood by credit unions. For example, she said a proposal involving advertising requirements would not eliminate the requirement that credit union advertising be accurate or disclosures related to share insurance. Instead, it would remove an outdated requirement that federally insured status be included in all advertisements, including short radio spots and social media ads, while retaining disclosure requirements at locations where members open accounts or make deposits.
Similarly, she said a proposal affecting federal credit union directors would not prevent credit unions from establishing qualifications for board members or diminish directors' responsibilities. Rather, it would eliminate a prescriptive requirement that newly elected directors obtain specific finance and accounting knowledge within six months, leaving those decisions to individual institutions and their members.
Parkhill also said a proposal to remove NCUA's standalone nondiscrimination rule does not weaken fair-lending requirements. She noted the regulation largely duplicates broader federal requirements under the Fair Housing Act and Equal Credit Opportunity Act and has not been updated in decades. Eliminating the duplicative rule, she said, could actually provide greater clarity by directing credit unions to the primary laws and regulations that govern fair lending and nondiscrimination.
Staff said the overall goal is to reduce unnecessary regulatory burden, improve clarity and maintain competitive parity with banks while preserving safety and soundness protections.
Hauptman said the agency is making significant progress on its deregulation project, describing it as a "spring cleaning" effort aimed at eliminating outdated, duplicative and overly burdensome rules while maintaining safety and soundness.
Hauptman said NCUA has received hundreds of stakeholder comments, emphasizing that the current effort represents only the first phase of a broader review.
Among the examples he highlighted were proposed changes to advertising requirements and third-party servicing rules. He said existing advertising regulations were written for an era dominated by print media and can force credit unions to comply with outdated notice requirements that no longer effectively reach members. He also pointed to the proposal to remove limits on the amount of indirect auto loans and participation loans a credit union may purchase from a single servicer, calling the current rule unnecessarily restrictive.
Hauptman stressed that the NCUA should not dictate how credit unions run their businesses unless a "material risk" is involved. Giving institutions greater operational flexibility, he said, allows them to better serve members without sacrificing safety and soundness.
He added that the agency has already finalized four regulatory relief measures in recent weeks and indicated additional deregulation proposals are still to come.
After NCUA staff reported the agency remains on track with its 2026 budget, Hauptman defended the agency's cost-cutting efforts and emphasized reduced costs for federal credit unions.
Hauptman said government agencies face unique challenges because they spend "other people's money on other people," but argued NCUA has been a responsible steward of industry resources. He pointed to agency downsizing, reorganization efforts and capital-project management as evidence that NCUA has maintained fiscal discipline while continuing to meet its supervisory responsibilities.
The chairman noted that NCUA's workforce has shrunk by roughly 20% since buyout offers were made last year, forcing the agency to reevaluate priorities and eliminate unnecessary work. That process, he said, helped fuel the regulator's broader deregulation and "spring cleaning" initiative.
Hauptman said the most tangible result for credit unions has been lower operating fees. He noted that federal credit unions received noticeably smaller 2026 bills and suggested few, if any, of their other major expenses—including labor, rent and insurance—have fallen as much.
"It is nice to be in a position to actually deliver," Hauptman said.
In what may have been his final public comments as NCUA chairman, Hauptman addressed the agency's one-member board structure, suggesting he expects the board to return to a more traditional makeup.
"I'm going to guess by the next year's budget, December of 2027, when people are sitting at this table, there's more than one board member there," Hauptman said. "None of those decisions are up to me, but that part of normalcy will probably return."
Hauptman added that future board meetings likely will not move as quickly once additional board members are seated.
"We will not have meetings that are this quick because there's just one person sitting here babbling, rather than three of us babbling," he joked.
Originally reported by CU Today.