Comment from The Endangered Small Credit Union Defense (www.endangeredsmallCUdefense.org)

Re: Comments on Proposed Amendments to 12 CFR Part 708a, Subpart C – Merger of Insured Credit Unions into Banks (Docket NCUA-2026-0982) Dear Chairman Hauptman and Members of the NCUA Board: On behalf of the Endangered Small Credit Union Defense (ESCUD), I submit these comments on the proposed rule to streamline regulations governing mergers of insured credit unions into banks. ESCUD is a 501(c)(4) nonprofit advocacy organization founded exclusively to secure targeted regulatory relief for small credit unions under $500 million in assets. We currently hold formal endorsements from more than 30 small credit unions nationwide (representing over 100,000 members and $1 billion in assets), with new endorsements added monthly. ESCUD strongly supports the NCUA’s broader Deregulation Initiative. We appreciate the Board’s ongoing efforts to reduce unnecessary burdens, modernize outdated requirements, and restore flexibility to credit union boards of directors. However, our singular mission is to help small credit unions **survive and thrive** as independent, not-for-profit cooperatives serving their unique memberships and underserved communities. Support for Procedural Simplifications — With Important Caveats We support several elements of the proposal that reduce overly prescriptive and outdated requirements: - Removal of the rigid “clear and conspicuous” definition and specific formatting mandates. - Modernizing pre-vote notice methods by replacing mandatory newspaper publication with more practical digital and lobby postings. - Streamlining due diligence narratives and eliminating non-binding voting guidelines. These changes are sensible updates for the digital age and will modestly lower administrative costs in the rare instances when a credit union considers a bank merger. However, when a credit union is considering a transaction that would cause it to disappear as a credit union (merger or conversion into a bank), ESCUD believes member engagement and notification should be strengthened, not weakened. Members are the owners of the cooperative. At the precise moment they risk losing their not-for-profit ownership rights, profit-sharing model, tax-exempt structure, and community-focused mission, they deserve clear, prominent, timely, and effective disclosures. We urge the NCUA to ensure that any final rule maintains — or even enhances — meaningful member awareness and participation rather than reducing procedural safeguards in charter-ending transactions. In short: ESCUD strongly favors deregulation that helps small credit unions stay alive. We are far more cautious about changes that primarily make it easier for them to disappear. Strong Call for Prioritization of Survival-Focused Relief for Small CUs This proposal, while well-intentioned, offers only narrow procedural relief in a scenario most small credit unions hope to avoid. It does little to address the day-to-day regulatory pressures actually driving small CUs toward merger or extinction. Our repeated surveys of small credit union CEOs consistently identify the top threats as: - Examination exhaustion (excessive length and frequency) - Examiner “over-compliance” pressure - CECL compliance costs We respectfully urge the NCUA to **prioritize future deregulation rounds on changes that will have the greatest impact on the small credit unions most at risk** — those under $500 million in assets, and especially those under $100–$250 million. Asset-tiered, risk-based relief calibrated to the scale and limited resources of tiny institutions would deliver real preservation value and help slow the ongoing loss of independent small credit unions. Thank you for your leadership on deregulation and for inviting public comment. ESCUD stands ready to provide additional survey data, compliance-cost examples from small CUs, or further input on future proposals. We look forward to continued collaboration focused on keeping small credit unions alive and serving their members as cooperatives. Sincerely, Doug Wadsworth President, Endangered Small Credit Union Defense (ESCUD) President, Tri-CU Federal Credit Union ($75M assets, Kennewick, WA) Doug@Tri-CU.com | 509-735-8331 x100 For a list of the 32 endorsing small CUs, visit: www.endangeredsmallCUdefense.org