Comment from The Endangered Small Credit Union Defense

The Endangered Small Credit Union Defense (ESCUD) submits these comments on behalf of our growing coalition of small credit unions (under $500 million in assets, with the vast majority under $100 million). ESCUD is a nonprofit founded in 2025 by Doug Wadsworth, President of Tri-Cities Community Federal Credit Union ($75 million, Kennewick, WA). We advocate exclusively for targeted regulatory relief that recognizes the vast differences between simple, single-location small credit unions and large complex, institutions. As of this date, ESCUD has received formal endorsements from 32 small credit unions nationwide representing more than $1 billion in assets and 100,000+ members. We support the NCUA’s ongoing efforts to review and streamline data collections. Reducing unnecessary reporting burden directly advances our mission: preserving small credit unions so they can continue serving underserved communities and living their not-for-profit cooperative roots. Small CUs already operate with minimal staff—often the CEO personally completes the 5300—making even modest reductions in manual effort highly impactful. 1. Specific Areas of the Call Report That Are Challenging for Small Credit Unions Small credit unions find the 5300 manageable overall because our simple operations mean we skip many of the schedules. However, we submit that some of the following items likely do create disproportionate manual burden relative to their limited value: - Loan Delinquency Under 60 Days (Page 7): Please eliminate this data collection. These loans are not reportable as delinquencies under standard definitions, yet tracking them requires significant manual effort due to their high volume and transient nature. This information provides minimal supervisory value for small CUs with straightforward portfolios. - Offsetting Assets by Negative Share Balances: Small CUs often carry immaterial negative share balances (typically $10,000 or less). Requiring asset offsets to comply with GAAP creates unnecessary reconciliation work across multiple schedules. The resulting balance sheet no longer matches our actual internal statements, all for an amount that is immaterial. Negative share accounts are not true loans. We recommend eliminating this offset requirement for credit unions under $100 million (or at minimum under $500 million). - Breakout of Share Certificates and IRAs by Maturity (under 1 year, 1-3 years, over 3 years – Page 19): This detailed aging requires manual listing and categorization of every certificate and IRA. For small CUs with simple deposit structures, a single aggregated category would suffice. The granular data adds little meaningful insight at the small-CU level while imposing ongoing labor costs. These changes would help reduce quarterly burden somewhat, without compromising NCUA’s ability to monitor risk. 2. Manual Processes and Automation The majority of small credit unions under $100 million complete the 5300 manually. While core vendors sometimes offer automation modules, the setup, testing, and ongoing maintenance costs likely exceed the benefit for tiny shops that only complete half of the pages anyway. Some small CU CEOs (like me) view personally completing the report as a valuable quarterly financial review. ESCUD therefore does not see broad automation mandates as a practical solution for our segment; targeted simplification or reduction of the data collected, would be more effective. 3. Additional Sections/Schedules That Could Be Made Optional for Small/Non-Complex CUs For credit unions under $100 million (or at least under $500 million) with simple operations and investments, the current reduced set of pages (after implementing the above suggestions) already strikes a reasonable balance. We do not recommend further streamlining at this time beyond the specific items noted in Question 1. Additional Recommendations - Burden Estimates: Current estimates likely understate the true burden on manual small-CU filers. CEO time spent on manual reconciliations and categorizations is particularly expensive relative to our limited net income. - Future Opportunities: We encourage the NCUA to continue this dialogue with additional RFIs focused on other high-burden areas for small CUs, such as examination scope, examination frequency, examiner over-compliance pressure, BSA, etc. ESCUD applauds Chairman Hauptman and the NCUA for this proactive review. Streamlining the 5300 Call Report can deliver tangible regulatory relief to the nation’s credit unions, big or small, helping credit unions redirect scarce resources toward member service rather than paperwork. We stand ready to provide additional examples or participate in further discussions. Thank you for the opportunity to comment. Sincerely, Doug Wadsworth President, Endangered Small Credit Union Defense (ESCUD) President, Tri-CU: Tri-Cities Community Federal Credit Union ($75M, Kennewick, WA)