The National Credit Union Administration (NCUA) has wisely adopted a policy direction to “review and potentially revise” all its regulations with an eye toward **removing rules that are obsolete, duplicative, or “overly burdensome”. This deregulate-where-possible approach is paired with an unwavering focus on prudence: NCUA emphasizes that remaining rules must squarely support the “safety, soundness, or resilience” of credit unions. In other words, if a requirement doesn’t make credit unions safer or stronger, it’s on the chopping block, which is welcome news for institutions and members alike.

Critically, this balanced relief effort is not deregulation for its own sake; it is targeted modernization. NCUA’s 2025 “Deregulation Project” was launched in alignment with a federal call to “Unleash Prosperity Through Deregulation”, undertaking a comprehensive review of Title 12, Chapter VII regulations. Initial proposals under this initiative zero in on streamlining cumbersome requirements without undermining oversight. For example, the NCUA has moved to eliminate outdated and redundant provisions in supervisory audits and data security rules, reducing clutter by re-issuing certain guidance outside of the formal rulebooks. These common-sense fixes keep the supervisory framework “sound and effective” while lifting needless burden. Such efforts demonstrate that regulatory relief and strong oversight are not mutually exclusive – they can and must coexist. As the NCUA itself notes, its mission for 2026 and beyond is to “enable access to financial services by facilitating safe, sound, and resilient credit unions”. Streamlining burdensome rules, done thoughtfully, advances that mission.

The urgency of regulatory right-sizing is perhaps felt most acutely by small credit unions. These community-based, member-owned institutions often operate with lean staff and resources, yet they serve as lifelines in areas large lenders ignore. Every hour and dollar spent navigating duplicative paperwork is time and money not spent on community lending, financial counseling, or new services for members. As a result, the NCUA has taken steps like developing streamlined examination procedures for credit unions under $50 million in assets and launching support initiatives for those under $100 million. These measures acknowledge that regulations must be scaled to institution size – a $20 million credit union should not be treated exactly like a $20 billion institution.

Industry stakeholders echo this point. A recent credit union movement op-ed observed that “disproportionate pressure of one-size-fits-all regulations…crush [the] smaller credit unions”, which underscores the “need for action” on regulatory relief. The Defense Credit Union Council (DCUC), representing credit unions serving our military and defense communities, has warned that “excessive regulation” drives up operational costs, stifles innovation, and reduces competitiveness for credit unions. DCUC has rightly urged policymakers to strike a balance: protect consumers and the financial system “without hindering the mission of credit unions”, as outdated or duplicative rules can limit institutions’ ability to serve members. In a 2025 letter to Congress, DCUC outlined reforms to “modernize credit union laws and protect credit union independence from excessive regulation, believing these steps will “help preserve financial choice, access, and resilience in communities nationwide”. In short, deregulation done right isn’t about abandoning oversight; it’s about removing roadblocks that needlessly impede credit unions’ service to members. Nowhere is this more vital than for small credit unions fighting to remain viable and relevant.

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NCUA’s current Chairman, Kyle S. Hauptman, deserves special praise for making regulatory modernization a top priority. Since assuming the chair, Hauptman has spearheaded the Deregulation Project and brought a sense of urgency to easing unnecessary burdens. He understands that regulatory bloat hits smallest institutions hardest, and he has been clear that the goal is to “increase the chances small credit unions can thrive, not be ground down under increasing regulatory burdens.” At the NCUA’s final 2025 board meeting, Chairman Hauptman affirmed that stripping away unneeded red tape is not about cutting corners on safety, but about giving well-run credit unions room to innovate and grow. The industry has noticed and applauded this commitment. This gratitude is widespread – from small credit union coalitions to defense credit unions – because the stakes are high. Every burdensome rule rolled back is capacity freed up for serving members and communities.

In a financial ecosystem that is constantly evolving, credit unions must be empowered to evolve as well. That means peeling away archaic rules and compliance overhead that no longer justify their costs, while maintaining robust safeguards for safety and soundness. The NCUA’s deregulatory drive, under the leadership of Chairman Hauptman is a timely and welcome course correction. It reaffirms that regulation can be streamlined without weakening oversight, a benefit to regulators, institutions, and members alike. Small credit unions, in particular, will find it easier to fulfill their people-helping mission when freed from one-size-fits-all mandates that “crush” their capacity to serve. The ultimate winners are the millions of members – military families, teachers, first responders, church congregants, neighborhood residents – who rely on credit unions for affordable financial services.

Cutting red tape the right way will enable credit unions to thrive and innovate, all while continuing to put members’ interests first – exactly as they have done for over a century. In empowering credit unions, we ultimately empower their members, and that is a cause well worth pursuing.