Succession Planning Q&A
February 28, 2025 7:30 amBy Donya Parrish, MCU VP Risk Management
Q: Did NCUA finalize its succession planning rule?
A: Yes, effective on January 1, 2026, federally insured credit unions (FICUs) will be required to have a written plan that includes specific information. The board will be required to review it every 24 months, at a minimum. The plan’s complexity will depend on the size and risk to the operations of the credit union.
Q: Does the rule cover all positions at the credit union?
A: While the proposed rule included loan officers, credit committee members, and supervisory committee members, the final rule excluded them. The final rule includes positions for members of the board of directors, management officials and assistant management officials, senior executive officers, and “any other personnel the board of directors deems critical given the FICU’s size, complexity, or risk of operations.”
Q: Are state-chartered credit unions in Montana required to comply?
A: Yes, since Montana does not have its own succession planning rule, state and federal examiners will expect state-chartered credit unions to comply with the NCUA rule.
Q: Did NCUA provide any tools to assist with the succession planning process?
A: Yes, NCUA offered a template for smaller credit unions to use for succession planning. While they noted it was developed with credit unions under $100m in assets in mind, NCUA also noted that “all FICUs might benefit from its use.”
Q: How do we start the process?
A: While not every succession plan comes to fruition, starting to have the conversation in your board room and with your management team will get you started thinking about portions of your plan that might need more attention than others. Using the template and starting to fill in the gaps before the January 2026 effective date can assist with the compliance requirement not sneaking up on you.
Q: Do you have any other resources to assist us?
A: Yes, we have a few blogs from recent years that include suggestions and resources for succession planning.
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