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

On behalf of the Endangered Small Credit Union Defense (ESCUD), a 501(c)(4) nonprofit advocacy organization representing 33 small credit unions nationwide, I submit these comments on the proposed amendments to Part 741. Our endorsing credit unions collectively serve over 100,000 members and hold more than $1 billion in assets. ESCUD supports the Board’s goal of reducing regulatory complexity. Removing unnecessary cross-references and relocating a few procedural requirements to more logical sections is a reasonable and welcome housekeeping measure that will make the regulations slightly easier to navigate. However, this proposal offers only marginal benefit to the small credit unions we represent. It does not change any substantive compliance obligations. All of the underlying requirements referenced in the removed sections remain fully in force. Small credit unions will still face the same compliance workload; they will simply have fewer pointer sections to read in Part 741. Most small credit unions under $100 million operate with very limited staff, often with the CEO handling compliance in addition to lending, operations, and member service. Our recent surveys of small CU CEOs show that their most significant burdens are examination exhaustion, examiner over-compliance pressure, BSA exam intensity, and the frequent issuance of Documents of Resolution (DORs) for relatively minor findings. These operational and examination burdens far outweigh any benefit from shortening cross-references. We therefore encourage the NCUA to focus its deregulation efforts on areas it can address administratively and that would provide real relief to small credit unions. These include: Directing examiners to reduce over-compliance pressure and accept reasonable, simple in-house compliance methods used by small credit unions when there is no material impact to safety and soundness; Reducing the length, scope, and frequency of examinations for healthy small credit unions (particularly CAMEL 1 and 2 institutions); Limiting DORs to material safety-and-soundness concerns and avoiding their use for minor or technical findings; and Taking a more measured and proportionate approach to BSA exam findings, especially where issues are isolated and present low risk. These types of changes would meaningfully reduce the time and cost burden on small credit unions without requiring legislative action. ESCUD appreciates the Board’s willingness to engage with small credit union perspectives and remains ready to work constructively with the NCUA on future proposals that help preserve these vital community institutions. Thank you for your consideration. Respectfully submitted, Doug Wadsworth President, Endangered Small Credit Union Defense President, Tri-Cities Community Federal Credit Union (Tri-CU) Doug@Tri-CU.com | 509-735-8331 x100 Officially Endorsing Small Credit Unions (33 total) Granco FCU (Ephrata, WA) • Mint Valley FCU (Longview, WA) • Nordstrom FCU (Everett, WA) • Tri-CU FCU (Kennewick, WA) • Connection CU (Silverdale, WA) • Spokane Media FCU (Spokane, WA) • Spokane City CU (Spokane, WA) • evergreenDIRECT CU (Tumwater, WA) • Prime Source CU (Spokane, WA) • IBEW 76 FCU (Tacoma, WA) • Community Healthcare FCU (Everett, WA) • Waterfront CU (Seattle, WA) • United Trades FCU (Tualatin, OR) • Benton County Schools CU (Corvallis, OR) • Alaska District Employees FCU (Anchorage, AK) • Alaska District Engineers FCU (JBER, AK) • POLAM FCU (Los Angeles, CA) • Vida FCU (Ontario, CA) • California Community CU (Sacramento, CA) • Desert Valleys FCU (Ridgecrest, CA) • SEG FCU (Laurel, MT) • Marshfield Medical Center CU (Marshfield, WI) • American Southwest CU (Sierra Vista, AZ) • Campus CU (Wichita, KS) • Ascension CU (Gonzales, LA) • New Orleans Firemen’s FCU (New Orleans, LA) • Milestones FCU #5144 (Lewiston, ME) • IBEW 26 FCU (Lanham, MD) • Revity FCU (Greensboro, NC) • Acclaim FCU (Greensboro, NC) • Bessemer System FCU (Greenville, PA) • Great Meadow FCU (Granville, NY) • Good Neighbors FCU (Depew, NY) • Chelsea Employees FCU (Chelsea, MA) • Cranberry FCU (West Wareham, MA)