Board Meeting Digest — December 2025
Share Insurance Fund: Q3 2025
The SIF reported $100.4 million in Q3 2025 net income — up $18.4 million from Q2 and $28.2 million from Q3 2024. The increase was driven by lower provision for insurance losses and higher investment income. Total fund assets reached $24 billion.
The equity ratio stood at 1.28% as of June 30, 2025 (updated semiannually), with a projected year-end ratio of 1.30%. Investment portfolio yield rose 9 bps to 2.77% as maturing treasuries at yields of 0.27%–1.80% were reinvested at higher rates.
Two failures, $7 million in losses
Two credit union failures in Q3 cost the fund $7 million against approximately $94 million in combined assets — a 7.5% loss-to-asset ratio. Year-to-date, the fund absorbed $24 million in losses against $591 million in failed institution assets (4% loss rate). Chairman Hauptman pressed for historical context on the loss-to-asset ratio, noting that the total assets of a failed institution overstate the actual cost to the fund: "just because a $100 million credit union has gone down doesn't mean we write a check for $100 million."
CAMELS distribution
Total credit unions fell to 4,339 (down 42 from Q2). The CAMELS 4–5 share of insured deposits held at 7%. The CAMELS 3 category improved to 8.4% from 9.2%. Over 90% of insured shares rated CAMELS 1 or 2.
The Regulator's Top Risk: Auto Lending
Chairman Hauptman identified auto lending as the single scariest asset class in the system — the most direct risk call from the NCUA chair in recent board meetings:
"Auto loan delinquencies in the country are now higher than they were in the financial crisis… about a third of credit union assets are in auto loans. So that's a big chunk."
He noted two compounding factors: the increase in vehicle prices and the increase in interest rates, which together produce "very large payments." He also stressed that this deterioration has occurred before any significant rise in unemployment — meaning the stress is driven by affordability, not job losses. If labor markets weaken, the auto delinquency trajectory could accelerate materially.
The Q4 2025 Call Report data corroborates the concern. The over-$10B cohort — where indirect auto concentration is highest — carries a 1.49% delinquency ratio, 46 bps above the system average and widening. The system-wide 60+ day ratio crossed 1.00% for the first time in the dataset.
2026–2027 Budget: 20% Cut, 24.65% Fee Reduction
The approved 2026 combined budget (operating + capital + SIF administrative expense) is $316.2 million with 967 positions — a 20% reduction from 2025. The 2027 budget is $325.3 million, $19.3 million below the draft, with year-over-year growth of 2.9%.
What credit unions will see on their bills
The operating fee charged to federal credit unions will decrease 24.65% in 2026. The concrete impact by institution size:
| Institution Size | Approximate 2026 Bill | Savings vs. Prior Trajectory |
|---|---|---|
| $100 million | ~$14,000 | ~$5,000 |
| $1 billion | ~$142,000 | ~$50,000 |
| $10 billion+ | — | $200,000+ |
Federal credit unions with assets at or below $2.16 million are exempt from the operating fee entirely. The fee reduction results from two factors: slightly higher-than-projected credit union asset growth (3.72% vs. 3.6% estimate) and a $1 million credit from previously collected but unspent operating fees.
The 2026 Overhead Transfer Rate is 61.8% (up 0.1 pp from 2025), meaning 61.8% of the budget is funded by SIF transfers and 38.2% by operating fees from federal credit unions.
Impact on state charters
State-chartered credit unions don't pay operating fees directly, but the budget reduction lowers the SIF draw by approximately $60 million for 2026. Using the same inputs as the Q2 equity ratio calculation, this could increase the equity ratio by approximately one-third of a basis point — modest but directionally positive. A one-basis-point shift in the equity ratio requires approximately $183 million in additional SIF balances.
Public comment themes
Ten comment letters were received. All supported the budget reductions. Eight commenters urged the NCUA to balance staffing cuts with maintaining specialized examination capacity. Five supported AI and technology investment. Five encouraged further travel cost reductions (the 2026 travel budget is already 13.4% below 2025). Four supported IT investments that improve operational efficiency, including automating data collection processes related to fields of membership.
Deregulation Project and New Charter
The NCUA launched its deregulation project with four active Notices of Proposed Rulemaking in the Federal Register. Chairman Hauptman framed the initiative as reducing the time small CU executives spend "working for NCUA" versus helping their members — "akin to spring cleaning," reviewing every regulation and guidance document for continued necessity.
Separately, the NCUA granted a new federal charter to Haven Federal Credit Union in Santa Clara, California — in the heart of Silicon Valley. New federal charters remain rare in an industry that has seen net charter contraction for over a decade, making each one notable.
FINASENSE Assessment
The December meeting's most actionable content is the operating fee reduction. A 24.65% decrease is material — $5,000 for a $100 million CU, $50,000 for a $1 billion CU — and flows directly to retained earnings in a year when the system needs every basis point of capital buffer it can get. The auto lending risk call from the chairman is significant not because it's new information (the Call Report data has shown this for quarters), but because it confirms the regulator is watching the same metric FINASENSE has been flagging. The deregulation project is early-stage but worth tracking: four NPRMs simultaneously is ambitious, and the compliance burden reduction could meaningfully affect operating costs for the Under $100M cohort.