By Alison Herrick, Partner, Wipfli
The NCUA 2026 priorities focus on loan quality, interest rate and liquidity risk, fraud prevention in payment systems, BSA/AML compliance and innovation under the GENIUS Act.
Here is an overview of seven priorities for 2026.
The headline of the 2026 priorities is the NCUA’s concern over deteriorating loan performance. Delinquency and charge-off rates have reached levels not seen in over 10 years, primarily from lagging effects of higher interest rates, inflated credit scores and collateral values, higher costs and exhaustion of pandemic-era financial support.
What examiners will look for:
Underwriting standards: Evidence that credit unions haven’t loosened standards to maintain volume as loan growth has moderated in recent years.
Loss mitigation: Effectiveness of workout programs and how proactive the credit union is with at-risk borrowers.
Allowance for Credit Loss reserves and methodologies: Scrutiny of Allowance for Credit Losses (ACL) to ensure reserves are sufficient for current economic volatility, as well as the credit union’s charge-off practices.
Portfolio management: Oversight and monitoring of the portfolio for material credit risk concentrations.
Third-party lending: Deep dives into various third-party risk management practices and the oversight and monitoring of these vendors.
While interest rates have begun to decline, the NCUA remains focused on sensitivity to market risk. Many credit unions are still managing underwater portfolios with low-yield assets while paying higher costs for deposits.
Key focus areas include interest rate risk (IRR) and liquidity risk. Examiners will continue to evaluate sound modeling practices, reasonable assumptions and appropriately tiered stress scenarios.
They will also look for how the credit union incorporates the risks within governance frameworks, contingency funding plans and overall strategic decision making.
While capital levels across the industry remain generally strong, the NCUA expressed concern about earnings sustainability amid margin pressure and rising credit costs. Examiners will evaluate whether current and projected earnings are sufficient to support capital targets under a range of stress scenarios.
With the rapid evolution of payment methods, specifically the shift toward more efficient, immediate access to funds, the NCUA has elevated payment systems security as a top priority.
Examiners will be checking for:
Effective governance and risk assessments
Vendor and third-party risk management
Cybersecurity governance and data protection practices
Fraud remains a pervasive and elevated risk, and NCUA examiners will continue to closely assess efforts to deter, detect and respond to fraud.
Examination reviews will emphasize the effectiveness of internal controls, including the adequacy of segregation of duties, governance structures and other safeguards designed to prevent and detect insider abuse.
The NCUA will also evaluate and refine its examination procedures to ensure that internal control assessments and related review areas remain aligned with the evolving fraud landscape through collaboration with key stakeholders across the credit union system, regulatory bodies and law enforcement partners. These coordinated efforts are intended to strengthen industry wide fraud awareness and enhance prevention and detection capabilities where possible.
The 2026 priorities emphasize the Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) programs. The NCUA expects programs to be tailored specifically to a credit union’s risk profile, rather than a one-size-fits-all approach.
Key expectations include:
Examiners will look for evidence that resources are concentrated on the highest-risk areas for money laundering and terrorist financing.
Changes in the regulatory system are expected in 2026 as FinCEN and regulators continue to modernize and strengthen the AML/CFT programs. Changes may include reducing BSA compliance burdens while helping financial institutions to maintain effective risk-based programs.
The letter also highlights the continued move forward with the following:
Creating a more efficient and tailored examination.
Implementation of Presidential executive orders and laws, including the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins).
The NCUA is also looking to streamline exams for small credit unions (under $50 million) while pushing larger institutions to embrace right-sized innovation.
Leaders should focus on documentation, stress-testing loan portfolios, updating contingency funding plans and ensuring the Board is trained to interpret program metrics.
Here are some next steps your credit union can take:
Conduct a comprehensive review of your credit risk management framework. Ensure that all exceptions to lending policies are clearly documented with strong rationale. Now is the time to stress-test your portfolio against a range of credit performance estimates to prove your capital can absorb potential losses.
Update your contingency funding plan to identify specific, available funding sources that can be accessed immediately. Ensure your Board is briefed on IRR metrics so they can articulate your credit union’s risk appetite during the exam exit meeting.
Perform a gap analysis on your payment system controls. Assess and document processes used to quickly detect deviations from normal transaction patterns and how those alerts are reviewed and acted on.
Audit your BSA risk assessment. If your membership demographic or service offerings have changed in the last 12 months, your BSA policy must be updated to reflect those new risks.
If your credit union is exploring stablecoin issuance or digital asset services, ensure you have an AI and innovation framework that’s ready for regulators. Focus on explainability – can you explain how your AI models make decisions to a layperson?
It’s important to remember that preparation for the 2026 NCUA priorities should not be a once-a-year event.
Success in this supervisory cycle requires a shift toward continuous monitoring – treating model risk and cybersecurity as living processes rather than static policies. By documenting not just your successes, but your rationale for risk-taking, you will align with the NCUA’s 2026 vision of a resilient and transparent credit union system.
Connect with Wipfli to learn more.