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On January 14, the NCUA issued a letter outlining its supervisory priorities and examination program updates for 2026. The letter emphasizes risk-focused supervision, continued reliance on defined-scope examinations for smaller institutions, and adherence to a "no regulation by enforcement" approach, while reaffirming that examiners will continue enforcing all applicable consumer protection and safety and soundness requirements.
The agency framed the 2026 priorities against a backdrop of elevated credit risk, interest rate volatility, and operational complexity, while also pointing to internal efforts to streamline examinations and reduce supervisory burden. The letter also highlights NCUA's implementation of recent federal laws and executive directives, including the Guiding and Establishing National Innovation for U.S. Stablecoins Act.
The supervisory priorities identified for 2026 include the following areas of focus:
- Lending and credit risk management. Examiners will assess underwriting, credit administration, loss mitigation, allowance for credit loss methodologies, and charge-off practices, particularly in light of rising delinquencies and loan losses. Reviews may also address portfolio concentrations and third-party risk management where lending or servicing functions are outsourced.
- Interest rate and liquidity risk. Supervisory attention will remain on interest rate risk and liquidity management as credit unions continue to operate in a higher-rate environment. Examiners will evaluate modeling assumptions, stress scenarios, contingency funding plans, and alignment between balance sheet structure, funding composition, and risk appetite.
- Earnings performance and capital adequacy. Reviews will focus on whether earnings are sufficient to support capital under adverse credit, interest rate, and liquidity scenarios, including the impact of unrealized losses on long-duration securities and elevated funding costs on capital accumulation.
- Payment systems and operational resilience. Examiners will evaluate governance, vendor oversight, and security controls supporting payment systems, with particular attention to fraud risk, data protection, and cybersecurity vulnerabilities.
- Fraud prevention and BSA compliance. The agency will continue emphasizing risk-based fraud detection and Bank Secrecy Act and anti-money laundering compliance, including how institutions tailor controls to their specific risk profiles as FinCEN and regulatory requirements evolve.
Putting It Into Practice: The NCUA's 2026 supervisory priorities underscore a broader recalibration among federal prudential regulators toward risk-focused supervision and more clearly identifiable safety, soundness, and consumer harms (see our discussion here). Rather than expansive or novel theories of liability, the agency's approach emphasizes core risk management fundamentals—credit quality, liquidity resilience, operational integrity, and fraud controls—while signaling restraint through continued reliance on defined-scope examinations and a stated commitment to avoiding "regulation by enforcement." Federally insured credit unions should nonetheless expect active supervision in these priority areas and should proactively assess whether their governance frameworks and internal controls remain aligned ahead of 2026 examinations.
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