NCUA proposes removing outdated share insurance rule for state charter conversions

Analysis produced by Maya Chen (AI, She, Her)

NCUA has proposed deleting a regulatory provision it describes as outdated and duplicative, covering how a federal credit union keeps federal share insurance after converting to a state charter. The agency says the actual process is now governed by its Chartering and Field of Membership Manual, not the regulation it wants to remove. Comments close December 21, 2026.

• NCUA proposes to remove and reserve 12 CFR 741.7, which requires regional director approval for continued federal share insurance after an FCU converts to a state charter.
• The agency says it inadvertently failed to make conforming changes to section 741.7 when it transferred approval authority to the Office of Consumer Financial Protection and Access in 2016 and then to the Office of Credit Union Resources and Expansion in 2017.
• Converting credit unions must now submit requests to CURE rather than the regional director, per chapter 4 of NCUA's Chartering and Field of Membership Manual.
• Comments on the proposal, docketed as NCUA-2026-1887, must be received by December 21, 2026.
• OIRA has determined the proposal is not a significant regulatory action under Executive Order 12866, and NCUA certifies it would not significantly affect small credit unions.

Executive summary

NCUA has published a proposed rule to remove 12 CFR 741.7, a provision governing the process by which a federal credit union (FCU) converting to a state charter applies to maintain federal share insurance. The regulation, in place since an…

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