CUNA supports the overall objective of NCUA’s succession planning proposal but feels the provisions would be more appropriate as guidance than regulation, it wrote to NCUA Monday. The proposal would require federal credit union boards of directors establish and adhere to process for succession planning for key positions.
“The proposal is intended to be of most benefit to smaller FCUs, which we agree are more likely to experience challenges in the area of succession planning,” the letter reads. “However, smaller credit unions are often the most burdened by new regulatory requirements. Thus, we believe the benefits of a succession plan requirement can generally be achieved through guidance, without the accompanying burden associated with regulation.”
CUNA notes the recent trend of NCUA adding to policies federal credit union boards must review, understand, and approve.
“Further, the fact that succession planning is already included in the NCUA’s Examiner’s Guide is additional support for including the provisions in this proposal as guidance rather than regulation,” the letter reads.
“An additional benefit of guidance over regulation is the ability of the NCUA to easily make changes to guidance in response to observed issues or economic forces without the often-burdensome notice and comment requirements under the Administrative Procedure Act associated with formal regulation,” it adds.