Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Rules and Regulations 104865 

1 89 FR 60329 (July 25, 2024). 

2 87 FR 6078 (Feb. 3, 2022). 

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Department of Energy. 

[FR Doc. 2024–30274 Filed 12–23–24; 8:45 am] 

BILLING CODE 6450–01–P 

NATIONAL CREDIT UNION 

ADMINISTRATION 

12 CFR Parts 701 and 741 

RIN 3133–AF42 

Succession Planning 

AGENCY: National Credit Union 

Administration (NCUA). 

ACTION: Final rule. 

SUMMARY: The NCUA Board (Board) is 

issuing this final rule to further 

strengthen succession planning efforts 

for all consumer federally insured credit 

unions (FICUs). This final rule requires 

that a FICU board of directors establish 

a written succession plan that addresses 

specified positions and contains certain 

information. In addition, the board of 

directors is required to regularly review 

the succession plan. The final rule also 

requires that newly appointed members 

of the board of directors have a working 

familiarity with the succession plan no 

later than six months after appointment. 

The final rule follows publication of a 

July 25, 2024, proposed rule and takes 

into consideration the public comments 

received on the proposed rule. In 

response to comments, the Board has 

amended the proposal to provide that a 

credit union board must review its 

succession plan no less than every 24 

months, as opposed to the annual 

review that would have been required 

under the proposed rule. The Board has 

also revised the proposed rule by 

removing loan officers, credit committee 

members, and supervisory committee 

members from the list of FICU officials 

that must be covered by the succession 

plans. In addition, non-substantive 

changes have been made to the wording 

used in the list of covered officials for 

purposes of clarity. The final rule also 

streamlines the required contents of the 

succession plans and no longer requires 

that deviations from approved 

succession plans be documented in the 

FICU board’s meeting minutes. Further, 

to help ensure that FICUs have the 

necessary time to develop their 

succession plans, the Board is delaying 

the effective date of the final rule until 

January 1, 2026. 

DATES: This final rule is effective on 

January 1, 2026. 

FOR FURTHER INFORMATION CONTACT: 

Office of Examination and Insurance: 

John Berry, Policy Officer, at (703) 664– 

3909 or at 1775 Duke Street, Alexandria, 

VA 22314. Office of General Counsel: 

Ariel Pereira, Senior Attorney, Office of 

General Counsel, at (703) 548–2778 or at 

the above address. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. Background 

II. Discussion of Public Comments 

A. The Comments, Generally 

B. Comments Regarding Alternatives to 

Rulemaking 

C. Comments Regarding Data and the 

Justification for Rulemaking 

D. Comments Regarding Regulatory Burden 

E. Comments Raising General Objections to 

Rule 

F. Comments Regarding the Inclusion of 

FISCUs 

G. Comments Raising Potential Privacy and 

Discrimination Concerns 

H. Comments Regarding Specific Rule 

Provisions 

I. Other Comments 

III. Regulatory Procedures 

A. Regulatory Flexibility Act 

B. Small Business Regulatory Enforcement 

Fairness Act/Congressional Review Act 

C. Paperwork Reduction Act 

D. Executive Order 13132 on Federalism 

E. Assessment of Federal Regulations and 

Policies on Families 

I. Background 

At its July 18, 2024, meeting, the 

Board approved a proposed rule to 

address succession planning at FICUs. 

The proposed rule was published in the 

Federal Register on July 25, 2024, and 

provided for a 60-day public comment 

period.1 The proposal followed 

publication of the Board’s earlier 2022 

proposed rule on the same topic.2 The 

July 25, 2024, proposed rule was based 

on that earlier proposed rule but 

included several changes that the Board 

believed would further strengthen 

succession planning efforts for both 

consumer federal credit unions (FCUs) 

and consumer federally insured, stateVerDate Sep<11>2014 16:29 Dec 23, 2024 Jkt 265001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\26DER1.SGM 26DER1

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3CUtoday.info, CUNA ACUC Coverage: What’s 

Happening in Executive Compensation (June 19, 

2019), https://www.cutoday.info/Fresh-Today/ 

CUNA-ACUC-Coverage-What-s-Happening-inExecutive-Compensation. 

4NCUA, Letter to Credit Unions 22–CU–05, 

CAMELS Rating System (March 2022), https://

ncua.gov/regulation-supervision/letters-creditunions-other-guidance/camels-rating-system. 

CAMELS is the acronym for the rating system used 

by the NCUA to assess a FICU’s performance and 

risk profile derived from the six critical elements 

of a FICU’s operations: Capital adequacy, Asset 

quality, Management, Earnings, Liquidity, and 

Sensitivity to Market Risk. 

5NCUA, Letter to Credit Unions 23–CU–01, 

NCUA’s 2023 Supervisory Priorities (January 2023), 

https://ncua.gov/regulation-supervision/letterscredit-unions-other-guidance/ncuas-2023- 

supervisory-priorities. 

chartered credit unions (FISCUs), which 

collectively are referred to as FICUs. 

Under the July 25, 2024, proposed 

rule a FICU board of directors would 

have been required to establish a written 

succession plan that addresses specified 

positions and contains certain 

information. In addition, the board of 

directors would have been required to 

review the succession plan in 

accordance with an established 

schedule, but no less than annually. The 

proposed rule would also have required 

that newly appointed members of the 

board of directors have a working 

familiarity with the FICU’s succession 

plan no later than six months after 

appointment. Interested readers are 

referred to the preamble of the proposed 

rule for additional details regarding the 

proposed regulatory amendments. 

Two ongoing factors highlighted the 

need for rulemaking on succession 

planning. The long-running trend of 

consolidation across all depository 

institutions has remained relatively 

constant across all economic cycles for 

more than three decades. Voluntary 

mergers can be used to create economies 

of scale to offer more or better products 

and services to FICU members. 

However, the Board is also aware of 

numerous instances in recent years 

where FICUs merged because of a lack 

of succession planning. More emphasis 

on succession planning would help 

reduce the number of such mergers. 

Another reason for a heightened focus 

on succession planning are the ongoing 

retirements of the ‘‘Baby Boomer’’ 

generation (individuals born between 

1946 and 1964). According to some 

sources, approximately 10 percent of 

credit union chief executive officers 

were expected to retire between 2019 

and 2021.3 Succession planning is 

critical to the continued operation of 

those credit unions with board members 

and executives that are part of this 

retirement wave. 

Given the importance of the topic, the 

NCUA has taken several steps to 

strengthen current succession planning 

efforts of FICUs. For example, in March 

2022 the NCUA issued Letter to Credit 

Unions 22–CU–05, CAMELS Rating 

System, which provides that 

‘‘succession planning for key 

management positions’’ is a key factor 

considered when assessing the 

Management CAMELS component 

rating of a credit union.4 Letter to Credit 

Unions 23–CU–01 included succession 

planning as one of the NCUA’s 

supervisory priorities for 2023.5 The 

July 25, 2024, proposed rule was 

designed to build upon these prior 

NCUA efforts. 

This final rule follows publication of 

the July 25, 2024, proposed rule and 

takes into consideration the public 

comments received on the proposed 

rule. In this final rule, the Board has 

incorporated the following amendments 

to the July 25, 2024, proposal: 

1. In response to public comments, 

the final rule provides that a board must 

review its succession plan no less than 

every 24 months, as opposed to the 

annual review that would have been 

required under the proposed rule. 

2. Also in response to public 

comments, the Board has revised the 

proposed rule by removing loan officers, 

credit committee members, and 

supervisory committee members from 

the list of FICU officials who must be 

covered by the succession plans. 

3. In addition, non-substantive 

changes have been made to the wording 

used in the list of covered officials for 

purposes of clarity. Specifically, the 

proposed rule listed ‘‘management 

officials’’ (as defined in the model FCU 

bylaws) and the ‘‘senior executive 

officers’’ identified in 12 CFR 

701.14(b)(2). Given the potential overlap 

between these two categories of 

officials, the final rule merges their 

listing in a single paragraph of the 

regulation. The final rule also simplifies 

the regulatory text by cross referencing 

to § 701.14(b)(2), rather than listing the 

senior executive officers. 

4. The final rule also streamlines the 

required contents of the succession 

plans. Specifically, the rule no longer 

specifies that a succession plan must 

address unexpected or temporary 

vacancies in covered positions. 

Although the Board encourages a FICU 

to consider these types of vacancies in 

its plan, it believes FICUs, and not the 

NCUA, are best positioned to determine 

how much detail is necessary to address 

the required plan elements. 

5. The final rule no longer requires 

that deviations from approved 

succession plans be documented in the 

FICU board’s meeting minutes. 

6. The final rule also makes a few 

technical, non-substantive, edits for 

clarity and precision of language. 

The final rule otherwise adopts the 

proposed regulatory requirements. 

FICUs are reminded that succession 

plans should include an estimate of the 

budgetary impacts of executing the 

succession plan, including costs 

associated with new hires, such as any 

hiring of recruitment firms and any 

increased compensation packages for 

new hires. Credit unions are not 

required to have an exact figure for any 

such anticipated costs, but at a 

minimum should provide an estimate to 

allow for better planning. 

To help ensure that FICUs have the 

necessary time to develop their 

succession plans, the Board is delaying 

the effective date of the final rule until 

January 1, 2026. This rule will be 

reapproved three years after its effective 

date for a term of the Board’s choosing. 

II. Discussion of Public Comments 

The comment period on the proposed 

rule closed on September 23, 2024. The 

NCUA received 187 public comments 

on the proposal. Comments were 

received from individual FICUs, state 

and regional credit union organizations, 

credit union trade organizations, credit 

union consulting services providers, 

and individuals. Approximately 116 of 

the comments were form letters with 

nearly identical wording. The issues 

raised in the form letters were similar to 

those made in many of the other 

comment letters. This section of the 

preamble summarizes the significant 

issues raised by the commenters and the 

Board’s responses to these comments. 

A. The Comments, Generally 

The majority of commenters, while 

acknowledging the importance of 

succession planning and agreeing with 

the intent of the proposed rule, raised 

concerns about the need for succession 

planning regulations, as well as some of 

the specifics of the proposed regulatory 

amendments. 

As discussed in greater detail in the 

following paragraphs, the large majority 

of the commenters questioned the need 

for succession planning regulations. 

Some of these commenters objected that 

the NCUA was overstepping its 

regulatory authority by issuing 

regulations on internal management 

matters best left to credit union 

discretion. Other commenters wrote that 

the NCUA already has tools capable of 

addressing succession planning, or that 

the topic could be better addressed 

through non-regulatory guidance. These 


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6 Id. 

7 Id. 

8 89 FR 60329, at 60334. 

commenters also noted that the other 

federal banking regulatory agencies have 

elected to address succession planning 

through guidance. Commenters also 

objected to the inclusion of FISCUs and 

noted potential conflicts with state 

requirements. 

A majority of the commenters also 

questioned the data cited in the 

preamble of the proposed rule as 

justification for the rulemaking. These 

commenters objected that the data was 

stale, and that more recent data did not 

seem to support the need for succession 

planning regulations to prevent FICU 

consolidations. The commenters also 

wrote that the NCUA had 

underestimated the time and resources 

required for complying with the 

proposed requirements, and that the 

rule would impose an undue 

compliance burden. Many commenters 

wrote that the burden of complying with 

the rule would actually increase the 

number of consolidations. Still others 

wrote that the NCUA’s goal of reducing 

FICU consolidations was misguided. 

With regard to the specific 

amendments, many commenters 

objected to the list of officials covered 

by the succession plans, writing that it 

was overly inclusive for the stated 

purposes of the rulemaking. Other 

commenters were concerned about the 

possibility that succession plans might 

be publicly posted, potentially raising 

privacy or age-discrimination issues. 

Some commenters wrote that requiring 

boards to review their succession plans 

at least annually was unnecessarily 

prescriptive. Commenters also 

expressed concerns about the proposed 

board education requirements and 

requested clarification of other 

provisions. 

B. Comments Regarding Alternatives to 

Rulemaking 

Comment: Guidance is more 

appropriate than rulemaking. The 

majority of commenters urged the Board 

to consider issuing guidance regarding 

succession planning as an alternative to 

rulemaking. While generally agreeing 

that succession planning is an important 

element of a FICU’s overall strategic 

planning process, the commenters wrote 

that a rule would only add to growing 

regulatory burden imposed on FICUs. 

The commenters noted that the issuance 

of guidance is consistent with the 

approach taken by the other federal 

banking regulatory agencies. The 

commenters wrote that the banking 

industry faces consolidation trends 

similar to those of credit unions. 

Nonetheless, the other banking agencies 

have opted to issue guidance regarding 

succession planning instead of 

undertaking rulemaking. 

NCUA Response. The Board 

continues to believe that rulemaking on 

succession planning is appropriate and 

necessary. While guidance can be 

helpful in describing sound practices or 

clarifying existing requirements, the 

lack of a regulation means there is no 

requirement that FICUs implement a 

formal, written succession plan. As a 

result, the NCUA lacks a full 

complement of regulatory tools to help 

address deficiencies in a FICU’s 

succession planning process. The 

absence of specific regulations on this 

topic also means there are no 

requirements as to what constitutes an 

acceptable succession plan. A regulation 

is therefore necessary to establish a 

clearly articulated, consistent, and 

enforceable set of succession planning 

standards. 

Comment: Succession planning is 

already addressed under CAMELS. 

Several commenters wrote that the rule 

is redundant since succession planning 

is part of every examination under the 

CAMELS rating system. The 

commenters noted that the CAMELS 

‘‘Management’’ component already 

considers succession planning for ‘‘key 

management positions.’’ The 

commenters wrote that this is consistent 

with the practice of the other federal 

banking regulatory agencies, which 

require their examiners to conduct a 

high-level assessment of banks’ 

succession planning in their rating of 

the capability and performance of 

management. The commenters noted 

that the examination process is the ideal 

time to discuss with a board of directors 

any weaknesses that exist in this area. 

NCUA Response. The NCUA does 

assess succession planning as part of the 

CAMELS Management component. 

However, as supervisory guidance, the 

Letter to Credit Unions that established 

CAMELS does not provide the NCUA 

with the authority necessary to fully 

address any inadequacies in a FICU’s 

succession planning practices and 

procedures. Letter to Credit Unions 23– 

CU–01 establishing the 2023 

supervisory priorities acknowledges 

these limitations. For example, the letter 

makes clear that NCUA examiners are 

precluded from evaluating ‘‘any formal 

or informal succession plans developed 

by credit unions beyond what would 

normally be considered in assigning the 

Management component of the 

CAMELS rating.’’ 6 Moreover, examiners 

may ‘‘not issue an Examiner’s Finding 

or Document of Resolution if the credit 

union has not conducted succession 

planning, or the planning is not 

adequate, unless the credit union is in 

violation of its own policy for 

conducting succession planning or 

administering any such plan(s).’’ 7

Accordingly, the NCUA continues to 

believe that rulemaking is necessary to 

establish clear, consistent, and 

enforceable succession planning 

standards. 

Comment: Succession plan 

requirements are duplicative of disaster 

program guidelines. Several 

commenters noted that under the NCUA 

guidelines codified in 12 CFR part 749, 

appendix B, all FICUs are encouraged to 

develop a program to prepare for a 

catastrophic act. As a part of this 

planning and program development, 

FICUs distinguish the roles of the 

FICU’s leadership and the board of 

directors, as well as backup personnel 

for various roles. The commenters wrote 

that the succession plan requirements 

are in many ways duplicative of the 

disaster guidelines and therefore 

unnecessarily add regulatory 

compliance burden. 

NCUA Response. The Board 

acknowledges that, as a result of other 

planning and documentation efforts, 

many FICUs may already have data and 

information that is useful to completing 

their succession plans. FICUs are 

encouraged to use such existing 

information, where appropriate, in 

preparing their succession plans. 

Further, the preamble to the July 25, 

2024, proposed rule notes that the 

catastrophic act guidelines may address 

several elements that are also relevant to 

succession planning. These suggested 

elements include a ‘‘business impact 

analysis to evaluate potential threats,’’ 

the determination of ‘‘critical systems 

and necessary resources,’’ and the 

identification of the ‘‘[p]ersons with 

authority to enact the plan.’’ 8

However, the Board does not agree 

that these codified guidelines are a 

suitable alternative to this final rule. For 

one thing, the guidelines are nonregulatory in nature and therefore do 

not establish the enforceable standards 

that, as discussed in the preceding 

responses, the Board has determined are 

necessary for succession planning. 

Further, the guidelines are broader in 

scope than, and only tangentially 

related to, succession planning. The 

guidelines are intended to ensure the 

continued operations of a FICU in 

response to an external, unforeseen, and 

hopefully infrequent event, whereas 

succession planning is meant to address 

the ongoing retention and recruitment 


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9 89 FR 60329, at 60330, footnote 16 citing to: 

NCUA, Truth in Mergers: A Guide for Merging 

Credit Unions, page 9, https://ncua.gov/files/ 

publications/Truth-In-Mergers.pdf. 

10https://ncua.gov/regulation-supervision/ 

manuals-guides/lessons-learned-mergers. 

11 89 FR 60329, at 60330. 

12 89 FR 60329, at 60332. 

13 89 FR 60329, at 60330. 14 89 FR 60329, at 60334. 

cycle institutions face, including for 

critical positions and those that have 

significant influence and impact on a 

FICU’s operations. The guidelines are 

therefore not an adequate substitute for 

regulations that specifically address 

FICU succession planning practices. 

Comment: The Call Report offers an 

alternative means of implementing 

succession planning. Several 

commenters wrote that the NCUA could 

determine the existence of a succession 

plan at FICUs by asking the question on 

the 5300 Call Report. Because Call 

Reports must be submitted quarterly, 

the NCUA will always have up-to-date 

information on a FICU’s succession 

plan. The Call Report is a way for FICUs 

to report to the NCUA a big picture of 

what is going on at their credit union 

and to document any potential risk 

areas. 

NCUA Response. While the 

suggestion made by the commenters 

could potentially serve as a means of 

notifying the NCUA whether a FICU has 

adopted a succession plan, it fails to 

ensure that FICUs adopt plans and 

would not address the quality of those 

plans. The final rule will clearly 

communicate the NCUA’s expectations 

regarding succession planning and 

establish enforceable standards for 

determining the sufficiency of the plans. 

Accordingly, the Board has not revised 

the proposed rule in response to these 

comments. 

C. Comments Regarding Data and the 

Justification for Rulemaking 

Comment: The NCUA relied on 

outdated or limited data to justify the 

proposed rule. The majority of 

commenters objected to the data cited in 

the preamble as justification for the 

rulemaking. Among other data, the 

preamble cites to a 2014 NCUA analysis 

that found that poor succession 

planning was either a primary or 

secondary reason for almost a third (32 

percent) of FICU consolidations.9 The 

commenters objected to the fact that the 

analysis dates from over a decade before 

the publication of this proposed rule 

and includes the years immediately 

following the 2007–2008 global 

financial crisis, which they said was 

likely a compounding factor in FICU 

consolidations. Several of the 

commenters pointed to a more recent 

NCUA analysis of mergers between 2017 

and 2021, which found that an 

‘‘inability to obtain officials’’ was the 

primary cause for under 3 percent of 

mergers.10 Other commenters wrote 

that, based on NCUA data, of the 149 

mergers occurring during the second 

half of 2023 and first half of 2024, only 

11 cited the inability to obtain officials 

as the reason for the merger. 

The commenters also objected to the 

preamble language stating that the 2014 

findings had been corroborated by 

industry participants.11 The 

commenters wrote that the article 

includes information on only 10 

mergers with only a few of the credit 

unions citing a lack of succession 

planning as a factor in the merger. 

NCUA Response. As an initial matter, 

and as noted in the preamble to the 

proposed rule, the Board’s justification 

for issuing this final rule is based not 

only on the data but also on the Board’s 

finding that ‘‘the need for succession 

planning as a sound governance practice 

[is] equally compelling.’’ 12 The Board 

found ‘‘that a compelling safety and 

soundness case exists for rulemaking in 

this area,’’ because the failure to 

adequately plan for changes in 

leadership can jeopardize the continued 

viability of a FICU and disrupt safe and 

sound operations upon the departure of 

key personnel.13 The safety and 

soundness rationale for this rulemaking 

remains even if the concerns raised by 

the commenters were valid. However, 

the commenters’ categorization of the 

data cited in the preamble is incorrect. 

The fact that some of the mergers 

included in the NCUA’s 2014 analysis 

occurred during the global financial 

crisis in no way diminishes the validity 

of the study. Indeed, the analysis 

acknowledges that the FICU’s weak 

financial condition was the primary or 

secondary cause for 78 percent of the 

consolidations, the largest cause for 

mergers during the ten-year period 

under review (2003 to 2012). The fact 

that during that same period the lack of 

adequate succession planning was still 

cited as a primary or secondary cause 

for 32 percent of mergers only serves to 

underscore the need for rulemaking in 

this area. 

Neither does the Board believe that 

the NCUA’s more recent analysis of 

mergers between 2017 and 2021 

undermines the earlier study. The 2014 

study specifically analyzed succession 

planning, while the more recent study 

looked at ‘‘inability to obtain officials.’’ 

While this inability could be partially 

due to the lack of a succession plan, it 

might also encompass other factors 

deterring potential candidates, such as 

the FICU’s inability to offer a 

competitive compensation package, 

reputational and operational obstacles 

to hiring, or geographic undesirability. 

A succession plan is critical to 

addressing such factors, but it is not a 

guarantee, especially when the FICU is 

faced with a sudden or unexpected 

leadership vacancy. The more recent 

study’s utility to inform this rulemaking 

is thus limited by the fact that it does 

not distinguish between those mergers 

occurring because of a lack of 

succession planning and those that 

happened despite the FICU’s best efforts 

in this regard. 

The Board also rejects the objections 

raised by the commenters regarding the 

news articles cited in support of the 

proposition that the merger ‘‘data has 

been corroborated by industry 

participants.’’ The commenters object to 

the number of mergers discussed in the 

articles. However, the footnote citation 

was included simply to illustrate the 

credit union industry’s general 

recognition that a failure to plan for 

succession is a contributing factor in 

consolidations. The footnote was 

included to complement the data and 

rationale set forth in the main text of the 

preamble rather than as an independent 

data source for the rulemaking. 

Comment: The proposed rule will 

have the unintended consequence of 

increasing the number of 

consolidations. Many commenters wrote 

that, contrary to the proposed rule’s 

stated goal of mitigating the effects of 

industry consolidation, it would 

actually lead to an increased number of 

mergers. The majority of these 

commenters focused on the additional 

regulatory burden of complying with the 

proposed rule, especially on smaller 

FICUs. The commenters wrote the 

additional time and resources required 

to comply with the proposed rule might 

lead smaller FICUs to conclude that a 

merger with a larger institution is the 

most sustainable path forward. One 

commenter wrote that the succession 

planning process might force smaller 

FICUs to confront challenging realities 

about their future prospects, such as 

their limited internal talent pools and 

the inability to offer competitive salaries 

or advancement opportunities. The 

commenters also expressed concerns 

that the preamble language noting that 

smaller FICUs might benefit from the 

assistance of larger FICUs in developing 

and implementing their succession 

plans could inadvertently result in 

mergers.14


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15NCUA, Succession Planning (2021), https://

ncua.csod.com/LMS/catalog/Welcome.aspx?tab_

page_id=-67&tab_id=221000382. 

16 89 FR 60329, at 60335. The PRA is codified at 

44 U.S.C. 3501–3520, and the implementing 

regulations issued by the Office of Management and 

Budget are located at 5 CFR part 1320. 

17See, Federal Deposit Insurance Corporation, 

Guidelines Establishing Standards for Corporate 

Governance and Risk Management for Covered 

Institutions with Total Consolidated Assets of $10 

Billion or More, 88 FR 70391 (Oct. 11, 2023) (to be 

codified at 12 CFR parts 308, 364). https://

www.federalregister.gov/documents/2023/10/11/ 

2023-22421/guidelines-establishing-standards-forcorporate-governance-and-risk-management-forcovered. 

18 5 CFR 1320.10. Under § 1320.10(b), OMB will 

not approve a collection of information for a period 

longer than three years. 

19NCUA, Financial Trends in Federally Insured 

Credit Unions 2024 Q2, page iii, available at: 

https://ncua.gov/files/publications/analysis/ 

quarterly-data-summary-2024-Q2.pdf. 

NCUA Response. The Board disagrees 

with the commenters that 

implementation of this final rule will 

increase the number of FICU 

consolidations. In the 2014 analysis of 

mergers discussed previously, FICUs 

did not identify regulatory compliance 

burden as a cause of mergers. The 

closest analogue among the listed 

causes—‘‘recordkeeping burden’’—was 

cited by only two percent of FICUs as 

either a primary or secondary cause for 

consolidation. In the more recent NCUA 

analysis for mergers occurring between 

2017 and 2021, regulatory burden was 

not included among the 11 listed causes 

for mergers (the term ‘‘recordkeeping 

burden’’ also did not appear). The 

NCUA is not aware of other data that 

supports the claims made by the 

commenters, and such data was not 

offered in the comments. 

The Board also notes that it has taken 

several steps to ease the burden 

imposed on FICUs by the new 

requirements. For example, the NCUA 

has posted a video series on succession 

planning on the internet.15 In addition, 

the Board has developed a sample 

template for a succession plan that may 

be appropriate for some smaller FICUs, 

though all FICUs may benefit from it. 

The Board has also revised the proposed 

rule by removing loan officers, credit 

committee members, and supervisory 

committee members from the list of 

FICU officials who must be covered by 

succession plans. This should further 

minimize burden by enabling FICUs to 

develop more appropriately tailored 

succession plans that better reflect their 

unique circumstances. Further, the 

Board is delaying effectiveness of the 

final rule until January 1, 2026, which 

should also decrease burden by 

providing FICUs with additional time to 

make any operational changes or 

resource allocations necessary for 

development of the succession plans. 

As noted by the commenters, the 

preamble to the proposed rule discussed 

that smaller FICUs may also benefit 

from seeking the assistance of larger and 

more sophisticated FICUs in developing 

and implementing their succession 

plans. For example, a larger FICU may 

provide technical expertise in the 

drafting of the plan or may detail 

personnel to temporarily fill a critical 

vacancy in a smaller credit union until 

such time as it is permanently filled. 

The Board recognizes the concerns 

raised by the commenters that such 

strategic partnerships between a larger 

and smaller FICU may sometimes lead 

to a merger. However, that is an 

individual decision that must be made 

by the FICUs involved, based on their 

specific facts and circumstances. 

Comment: The goal of preventing 

consolidations is misplaced. Several 

commenters objected to the preamble 

language citing increased consolidations 

as a driving factor for the rule. The 

commenters wrote that the NCUA has 

historically been agnostic on the 

appropriateness of a merger for a 

particular FICU, leaving the decision to 

the FICU’s management and 

membership. One commenter noted that 

there are situations where a smaller 

FICU may propose a merger as a key 

component of its succession plan. The 

commenters wrote that in some 

instances a merger may be the best 

approach for a FICU and its members. 

The commenters wrote that the decision 

to merge should therefore be left to the 

FICU. 

NCUA Response. One of the Board’s 

stated goals in undertaking this 

rulemaking is to reduce the number of 

unplanned or forced mergers resulting 

from a FICU’s failure to adequately plan 

for changes in leadership. However, the 

Board agrees with the commenters that 

voluntary mergers can be used by FICUs 

to achieve various objectives, including 

creating economies of scale to offer 

more or better products and services to 

members. The reasons for voluntarily 

merging vary by FICU. For example, 

mergers may be a strategic decision as 

part of the continuing credit union’s 

growth strategy, while the merging 

credit union’s management may be 

seeking to expand services for the 

members. This final rule does not 

change the Board’s longstanding 

position that, to the extent any such 

decision meets the applicable statutory 

and regulatory requirements, the 

determination of whether a merger is 

appropriate is best left to the particular 

FICU’s management and membership. 

D. Comments Regarding Regulatory

Burden

Comment: The NCUA underestimated 

the regulatory burden imposed by 

succession planning. Many commenters 

wrote that the proposed rule 

underestimated the amount of time 

FICUs would be required to spend 

ensuring compliance with the 

succession plan requirements. The 

Paperwork Reduction Act (PRA) 

statement contained in the proposed 

rule estimated about 10 hours per year 

per FICU.16 The commenters wrote that 

this estimate failed to adequately 

account for all of the time and cost that 

would be incurred to understand the 

regulatory requirements and formulate 

strategies for filling vacancies. The 

commenters also objected that the 

estimate did not sufficiently consider 

the resources required to regularly audit 

and update the plans, including 

examiner consultations. One commenter 

pointed to a proposed rule issued by 

another federal banking regulatory 

agency addressing succession planning 

and noted that agency estimated 40 

annual hours for plan development and 

20 hours for annual reviews.17

NCUA Response. The information 

provided in the proposed rule 

represents the NCUA’s best estimate of 

the information collection burden 

associated with the succession planning 

requirements. As with all PRA 

collections of information, the estimates 

of the associated burden may change 

over time as the agency and regulated 

entities gain experience with 

implementation. Under the PRA 

regulations, Office of Management and 

Budget (OMB) approval of an agency 

collection of information is subject to 

periodic renewal through a notice and 

comment process.18 The Board is 

committed to ensuring the accuracy of 

its PRA burden estimates, and the 

information collections established by 

this final rule are subject to such 

process. 

The estimate noted by the 

commenters that was provided in the 

proposed rule issued by another federal 

banking agency does not provide a 

useful comparison. Under its own 

terms, that rulemaking applies solely to 

covered institutions with total 

consolidated assets of $10 billion or 

more. According to the most recent 

quarterly data available to the NCUA, 

there were only 21 FICUs in this asset 

category as of the second quarter in 

2024.19 These institutions are far larger 

than most FICUs, and their succession 

plans would necessarily reflect their 


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104870 Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Rules and Regulations 

20Supra, note 15. 

21 5 U.S.C. 801–808. The CRA was included as 

part of the Small Business Regulatory Enforcement 

Fairness Act, Public Law 104–121 (March 29, 1996). 

size and operational complexity. In 

contrast, the vast majority of FICUs 

would have more streamlined 

succession plans. Further, and as noted 

in a preceding response, the NCUA has 

made available several resources to ease 

the burden imposed by this final rule, 

including an optional plan template. 

The estimated information collection 

burden reflects the availability of these 

resources. 

Comment: The proposed rule will 

unduly increase regulatory burden, 

especially on smaller FICUs. Several 

commenters wrote that FICU resources 

are already under strain and the 

proposed rule would only serve to add 

to the cumulative regulatory burden 

faced by FICUs. The commenters wrote 

that, given the complexity of the 

business environment over the past 

several years and the pressures on the 

industry’s business model in general, 

the NCUA should tread lightly in 

adding to the list of requirements. The 

commenters expressing these concerns 

were particularly focused on the 

regulatory burden imposed on smaller 

FICUs that lack the resources and staff 

available to larger institutions. 

NCUA Response: The Board is 

mindful of the regulatory burden 

imposed by its regulations and is 

committed to providing assistance and 

resources to help FICUs comply with 

their regulatory obligations. The NCUA 

currently offers training and other 

resources to aid FICUs in developing 

their succession plans. As noted, the 

NCUA has posted a video series on 

succession planning on the internet.20

FICUs with a low-income designation 

may be able to apply for technical 

assistance grants to support succession 

planning or offset training costs through 

the Community Development Revolving 

Loan Fund. As also previously 

discussed, FICUs may use already 

existing information in preparing their 

plans. FICUs are encouraged to make 

use of these and other available 

resources in complying with the 

proposed rule. The Board has also 

narrowed the list of FICU officials that 

must be covered by the plans, enabling 

FICUs to develop succession plans that 

better reflect their unique 

circumstances. Further, the Board is 

delaying the effective date of the final 

rule until January 1, 2026, which will 

provide FICUs with additional time to 

develop their succession plans. 

The Board is especially mindful of the 

burden imposed on smaller FICUs, as 

they may lack the resources or expertise 

to develop succession plans. 

Accordingly, smaller FICUs may 

especially benefit from the existing 

resources identified above. The NCUA’s 

Small Credit Union and Minority 

Depository Institution Support Program 

is another available resource through 

which FICUs with less than $100 

million in total assets and minority 

depository institutions of any size may 

seek assistance in a variety of areas, 

including succession planning. In 

addition, the Board again notes that it 

has developed a sample template for a 

succession plan that may be appropriate 

for smaller FICUs, though all FICUs may 

benefit from it. FISCUs electing to use 

the template should consult applicable 

state requirements to ensure their 

succession plans are consistent with any 

such requirements. 

Comment: Classification of the rule as 

‘‘major’’ under the Congressional 

Review Act. One comment expressed 

concern that the NCUA might not 

classify the rule as ‘‘major’’ for purposes 

of the Congressional Review Act 

(CRA).21 A rule that is ‘‘major’’ under 

the CRA may take effect no earlier than 

60 calendar days after the Congress 

receives the statutorily prescribed rule 

report from the agency or the rule is 

published in the Federal Register, 

whichever is later. The commenter was 

concerned that not classifying the rule 

as ‘‘major’’ would underestimate the 

true impact of the succession planning 

requirements, particularly on smaller 

FICUs. 

NCUA Response. The NCUA 

acknowledges its obligations under the 

CRA. As required by the CRA, the 

NCUA has submitted this final rule to 

OMB for it to determine if the final rule 

is a ‘‘major rule.’’ The NCUA also will 

file appropriate reports with Congress 

and the Government Accountability 

Office (GAO) so this rule may be 

reviewed. 

The CRA defines a major rule as one 

that has resulted in or is likely to result 

in (A) an annual effect on the economy 

of $100,000,000 or more; (B) a major 

increase in costs or prices for 

consumers, individual industries, 

federal, state, or local government 

agencies, or geographic regions; or (C) 

significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or on the 

ability of United States-based 

enterprises to compete with foreignbased enterprises in domestic and 

export markets. The CRA vests the 

ultimate decision as to whether this 

final rule qualifies as ‘‘major’’ with 

OMB. However, the Board does not 

believe that this final rule meets the 

definition of a ‘‘major rule’’ under the 

CRA. 

While the final rule may impose some 

additional costs on FICUs, it is unlikely 

that these costs would rise to the $100 

million required under the CRA 

definition of a ‘‘major rule.’’ The Board 

also believes that several factors 

mitigate the potential costs imposed on 

FICUs. For example, the Board is 

providing a sample template for a 

simple succession plan that may be 

appropriate for some FICUs. Many 

FICUs have already adopted succession 

plans, and these existing plans should 

already address at least some of the 

elements required by the final rule, 

thereby minimizing the cost of 

complying with the new requirements. 

As previously noted, the NCUA also 

offers training and other resources to aid 

credit unions in developing their 

succession plans. FICUs are also 

encouraged to use already existing 

information in preparing their plans, 

such as the data used to develop the 

recommended program to prepare for a 

catastrophic act. These resources should 

further reduce the costs of preparing 

succession plans. 

Neither does the Board believe that 

the final rule meets the second and third 

prongs of the CRA ‘‘major rule’’ 

definition. The final rule imposes new 

reporting requirements that will not 

directly impact consumer costs for the 

financial products offered by FICUs. Nor 

are these reporting requirements likely 

to drive up costs for the credit union 

industry, governments, or geographic 

regions. The effects of the new 

requirements are also unlikely to 

significantly affect employment, 

competition, investment, or innovation, 

as contemplated under the CRA. 

E. Comments Raising General 

Objections to Rule 

Comment: The proposed rule 

constitutes regulatory overreach. Several 

commenters wrote that, while it is the 

NCUA’s responsibility to supervise 

credit unions so as to protect the safety 

and soundness of the credit union 

system, the proposed rule oversteps the 

agency’s regulatory authority. The 

commenters wrote that succession 

planning is appropriately the fiduciary 

responsibility of a FICU’s board of 

directors as only an individual FICU can 

determine the appropriate timing and 

extent of succession planning needed to 

preserve the health of the FICU and its 

members. The commenters worried that 

the rule could lead to an unintended 

consequence where NCUA examiners, 

rather than focusing on the outcomes 

and effectiveness of a succession plan, 


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Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Rules and Regulations 104871 

22 12 U.S.C. 1752–1775. 

23 12 U.S.C. 1766(a). 

24 12 U.S.C. 1787(b)(1). 

25 12 U.S.C. 1789(a)(11). 

26 12 U.S.C. 1786. 

27Proposed § 701.4(e)(2)(vi), finalized as 

§ 701.4(e)(2)(iii) 

might use their supervisory authority to 

impose their own views on how 

succession planning should be 

managed. The commenters wrote that 

such a scenario could lead to a 

significant administrative workload, 

diverting attention and resources away 

from serving members. 

NCUA Response. The Board 

continues to believe that NCUA 

rulemaking on succession planning is 

both appropriate and consistent with 

the agency’s statutory authority. While 

the Board agrees that succession 

planning is a responsibility of the 

FICU’s board of directors, it also finds 

that a compelling safety and soundness 

case exists for rulemaking in this area. 

The failure of FICUs to adequately plan 

for succession poses a risk not only to 

individual FICUs and their memberowners, but to the credit union system 

as a whole and to the Share Insurance 

Fund. Without adequate planning, key 

operations could be impacted during 

management transitions or leadership 

vacuums, such as recordkeeping, 

lending and other member services, 

liquidity management, cybersecurity, 

compliance with laws and regulations, 

and other critical responsibilities. 

The proposed regulatory changes are 

designed to mitigate this risk and are 

consistent with the Board’s statutory 

duty to ensure a safe and sound system 

of cooperative credit for its memberowners, as the proposed rule explained. 

Under the FCU Act, the NCUA is the 

chartering and supervisory authority for 

FCUs and the federal supervisory 

authority for FICUs.22 The FCU Act 

grants the NCUA broad authority to 

issue regulations governing both FCUs 

and all FICUs. Section 120 of the FCU 

Act is a general grant of regulatory 

authority and authorizes the Board to 

prescribe rules and regulations for the 

administration of the FCU Act.23

Section 207 of the FCU Act is a specific 

grant of authority over share insurance 

coverage, conservatorships, and 

liquidations.24 Section 209 of the FCU 

Act is a plenary grant of regulatory 

authority to the Board to issue rules and 

regulations necessary or appropriate to 

carry out its role as share insurer for all 

FICUs.25 Moreover, the NCUA has 

statutory authority to determine 

whether FICUs are operated in an 

unsafe or unsound manner and 

terminate a FICU’s insurance if a FICU 

is not operated in a safe and sound 

manner.26 This final rule will help to 

identify or prevent unsafe or unsound 

practices. Accordingly, the FCU Act 

grants the Board broad rulemaking 

authority to ensure that the credit union 

industry and the Share Insurance Fund 

remain safe and sound and service to 

members is maintained in compliance 

with applicable laws and regulations. 

In assessing compliance with this 

rule, the NCUA will focus on whether 

the FICU has developed a succession 

plan that addresses the elements 

required by the final rule and is 

consistent with the FICU’s size and 

complexity. The Board emphasizes that 

FICUs, not the NCUA, are best 

positioned to assess various risks and 

opportunities related to succession 

planning. A FICU will need to make its 

own determinations as to how much 

detail is necessary to address the 

required plan elements and whether 

additional factors, besides those 

required by this final rule, should be 

considered in its succession planning 

process. The NCUA does not intend to 

micromanage a FICU’s succession 

planning process and may issue 

guidance, as it deems necessary, to 

clarify a FICU’s discretion in developing 

its succession plans and further assist 

FICU succession planning efforts. 

Comment: A ‘‘one-size fits all’’ 

approach is inappropriate. Several 

commenters objected to the broad 

application of the proposed rule to all 

FICUs, regardless of their size and 

operational complexity. The 

commenters wrote that individual 

FICUs have unique challenges and 

governance structures. The commenters 

wrote that uniform requirements might 

limit the ability of a FICU to design a 

plan that best aligns with its strategic 

objectives and long-term viability. Some 

of these commenters focused on the 

potential impacts of uniform 

requirements on smaller FICUs that may 

not have the resources to meet the 

detailed requirements. The commenters 

wrote that the diversity among FICUs— 

ranging from small, community focused 

institutions to larger, complex 

organizations—requires flexibility in 

succession planning that a rigid 

regulatory mandate may not 

accommodate. 

NCUA Response. The Board agrees a 

uniform approach to succession 

planning would fail to account for the 

diversity among FICUs. The final rule 

accommodates such differences. For 

example, in response to public 

comment, the Board has revised the 

proposed rule by narrowing the list of 

FICU officials that must be covered by 

the succession plans, thereby enabling 

FICUs to develop more appropriately 

tailored plans that better reflect their 

unique circumstances. So long as 

succession plans address the elements 

required by the final rule, FICUs may 

adjust their plans to reflect operational 

differences, varying governance 

structures, and other unique 

circumstances. FICUs may include 

within the scope of their plans ‘‘other 

personnel the board of directors deems 

critical given the [FICU’s] size, 

complexity, or risk of operations. This 

includes new positions that may be 

required due to planned changes in 

operations, supervisory landscape, or 

corporate structure.’’ 27

As the preamble to the proposed rule 

noted, the expectation is for a FICU to 

develop a succession plan that is 

consistent with its size and complexity. 

Therefore, smaller FICUs are more likely 

to have a simple succession plan that 

only addresses a few key leadership 

positions. Larger and more sophisticated 

FICUs are expected to have more 

detailed plans. For example, smaller 

FICUs may have fewer board members, 

or have fewer staff that would qualify 

for the positions listed in the proposed 

rule for inclusion in the succession 

plan. Likewise, smaller FICUs are likely 

to have less expansive employee 

recruitment, development, and retention 

strategies. 

F. Comments Regarding the Inclusion of 

FISCUs 

Comment: Inclusion of FISCUs is 

inappropriate. Several commenters 

objected to the inclusion of FISCUs 

within the scope of the proposed 

regulatory requirements. Some of the 

commenters wrote that the inclusion of 

FISCUs signals to the states that their 

regulatory agencies are not equipped to 

ensure that FISCUs are adequately 

positioned for the future. These 

commenters wrote that the assumption 

is contrary to data that demonstrates 

state charters have fewer failures, more 

growth, and a history of strong 

management performance. The 

commenters urged the NCUA to narrow 

the applicability of the rule to exclude 

FISCUs as was the case in the Board’s 

2022 proposal. 

NCUA Response. As discussed above, 

the Board finds that compelling safety 

and soundness reasons exist for 

undertaking rulemaking on succession 

planning. The failure of FICUs— 

whether federal or state-chartered—to 

adequately plan for succession poses an 

undue risk to the credit union system 

and to the Share Insurance Fund. The 

inclusion of FISCUs within the scope of 

the final rule is consistent with the 


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104872 Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Rules and Regulations 

28 12 U.S.C. 1752–1775. 

29 § 741.228. 

30 89 FR 60329, at 60332. 31 89 FR 60329, at 60332; proposed § 741.228. 32Proposed § 701.4(e)(3)(i). 

Board’s statutory authority to ensure a 

safe and sound system of cooperative 

credit for its member-owners. Under the 

FCU Act, the NCUA is the chartering 

and supervisory authority for FCUs and 

the federal supervisory authority for 

FICUs.28 The FCU Act also grants the 

NCUA broad authority to issue 

regulations governing all FICUs. 

The Board emphasizes that, contrary 

to the assertion made by the 

commenters, this final rule does not 

reflect a statement on the efficacy of 

state efforts to address succession 

planning. Specifically, the final rule 

provides that for FISCUs in states that 

have established succession planning 

requirements, the NCUA will defer to 

such requirements to the extent no 

conflict exists between the final rule 

and the state requirements.29

Comment: The FISCU carveout is 

confusing. Several commenters, while 

supportive of the proposed rule’s 

carveout for FISCUs in states where 

succession planning is addressed, found 

the wording of the provision confusing. 

The preamble of the proposed rule 

stated that ‘‘to the extent that a FISCU 

is subject to a state statutory or 

regulatory requirement that conflicts 

with the proposed rule, the NCUA will 

defer to the state requirement.’’ 30 The 

commenters wrote that this wording 

implies that if a state rule addresses 

succession planning, FISCUs in that 

state would be exempt from the 

proposed rule. However, the regulatory 

text of the proposed rule at § 741.228 

provides that a FISCU must adhere to 

the succession planning requirements 

‘‘to the extent these regulatory 

provisions do not conflict with an 

applicable state requirement.’’ 

According to the commenters, this 

language implies only a partial 

exemption from specific conflicting 

provisions. These commenters wrote 

that while a state may not have a 

specific statutory or regulatory 

requirement addressing succession 

planning, it may use definitions or have 

issued guidance that differs from that of 

the NCUA proposed rule. 

In addition, one commenter wrote 

that neither the preamble nor the 

proposed regulatory text uses the word 

‘‘exempt’’ to describe the applicability 

of the rule to a FISCU in a state that 

addresses succession planning. Instead, 

the preamble uses defer, and the 

regulatory text is silent. The commenter 

recommended that, absent a total 

exclusion of FISCUs from the scope of 

the rule, the Board should provide a 

simplified exemption provision that 

exempts FISCUs in a state upon notice 

from the state regulator to the NCUA 

regional director that the state 

supervises succession planning by rule, 

guidance, or through the examination 

process. The commenter wrote that this 

approach would reduce confusion, ease 

administration, and presents no greater 

risk of material loss to the Share 

Insurance Fund. 

NCUA Response. The Board has not 

revised the rule in response to these 

comments. Contrary to the assertions 

made by the commenters, there is no 

conflict between the preamble language 

and the regulatory text. Both provide 

that the NCUA’s deferral is contingent 

on a lack of conflict between the rule 

and the state requirement.31 Nowhere 

does the preamble indicate, as the 

commenter suggests, that the deferral 

provision is intended as a complete 

exemption for FISCUs from the 

regulatory requirements. Further, as the 

commenter writes, the deferral only 

applies to legally enforceable state 

requirements, such as statutes, 

regulations, or other issuances that are 

binding under state law. The deferral 

does not apply to other issuances in the 

form of guidance, which may be set 

forth in policy statements, handbooks, 

letters, or similar issuances. While these 

guidance documents may represent 

supervisory expectations, such as for 

purposes of determining a credit union’s 

CAMELS and risk ratings, FISCUs are 

not required to comply with such 

guidance because it is by definition nonbinding. The Board has also not elected 

to adopt the alternate process suggested 

by the commenter, because it continues 

to believe that whether deferral applies 

is best addressed on a case-by-case basis 

during the examination process. 

Comment: The NCUA should 

consolidate the regulation applicable to 

FISCUs. One commenter was concerned 

regarding the structure of 12 CFR part 

741, which identifies the regulatory 

requirements applicable to FISCUs by 

cross-referencing regulatory provisions 

for FCUs codified elsewhere in title 12 

of the Code of Federal Regulations. The 

commenter wrote that, while this might 

seem like a minor detail, it results in 

confusion and inefficiency for many 

FISCUs as they sift through FCU rules 

to determine what may apply to them. 

The commenter wrote that there is no 

compelling argument against 

consolidating FISCU regulations in a 

single location. 

NCUA Response. The suggestion 

made by the commenter is outside the 

scope of the rulemaking, Accordingly, 

the rule has not been revised in 

response to the comment. However, the 

NCUA remains committed to working 

with all FICUs to ensure the clarity of 

their regulatory obligations. 

G. Comments Raising Potential Privacy 

and Discrimination Concerns 

Comment: Concerns regarding 

expected retirement and vacancy date 

requirements. The proposed rule would 

require that a succession plan identify 

the anticipated vacancy date for each of 

the covered positions, ‘‘such as the 

incumbent’s retirement eligibility date 

or announced departure date.’’ 32

Several commenters objected to this 

provision, writing that it was unduly 

burdensome and could potentially raise 

privacy and age discrimination 

concerns. The commenters wrote that 

the shift from employee pensions based 

on years of service to defined 

contribution plans have dramatically 

altered the concept of retirement and 

made it difficult to estimate when an 

individual will retire. Other 

commenters wrote that many FICU 

management officials operate under 

employment agreements that may be 

renewed or extended. Requiring that 

FICUs publish such dates could lead to 

charges of age discrimination or be used 

by management to force an employee 

out who has no intention of retiring. 

NCUA Response. As an initial matter, 

the Board notes that it is not requiring 

that FICUs make their succession plans 

public, nor does the Board intend to do 

so. Succession plans will be reviewed 

by examiners and will be treated as 

confidential supervisory documents, as 

with other supervisory matters. 

The provision is intended solely as a 

planning aid. In the case of elected 

officials, such date is clearly the 

expiration of the incumbent’s term. 

However, the expected vacancy date for 

non-elected officials can be less clear. 

The final rule does not require the FICU 

use a specific date, but suggests some 

possible proxies, including the 

individual’s anticipated retirement date 

or announced departure date. A credit 

union can also note that a retirement or 

departure date is unknown. The 

decision of what to reflect for the date 

is at the FICU’s discretion. 

The Board emphasizes that inclusion 

of any known or estimated retirement or 

departure date is not intended to create 

a requirement that an individual will 

retire or otherwise vacate a position on 

a specific date. The Board, therefore, 

understands that these dates may 

evolve. Nevertheless, the inclusion of a 

specific or approximate date will 


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Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Rules and Regulations 104873 

33 89 FR 60329, at 60333. 

34 Id. 

35Specifically, section 111 of the FCU Act 

provides that ‘‘[t]he management of a Federal credit 

union shall be by a board of directors, a supervisory 

committee, and where the bylaws so provide, a 

credit committee’’ (12 U.S.C. 1761). The model FCU 

bylaws codified in Appendix A of 12 CFR part 701 

expand the list of senior FCU officials to include 

management officials, assistant management 

officials, and loan officers. The NCUA regulation at 

12 CFR 701.14 defines the term ‘‘senior executive 

officer’’ to include the FICU’s chief executive officer 

(typically this individual holds the title of president 

or treasurer/manager), any assistant chief executive 

officer (for example, any assistant president, any 

vice president, or any assistant treasurer/manager) 

and the chief financial officer (controller). 

36 89 FR 60329, at 60333. 

37Proposed § 701.4(e)(2)(vi), finalized as 

§ 701.4(e)(2)(iii). 

38Proposed § 701.4(e)(4)(ii). 

promote conversations within the FICU 

and allow for better planning in advance 

of a transition, thus accomplishing the 

purpose of the final rule. Further, the 

FICU should update the dates as 

necessary to reflect changes in an 

individual’s circumstances or plans. 

Comment: Concerns regarding public 

posting of succession plans. The 

preamble to the proposed rule provided 

that ‘‘succession plans should provide 

sufficient detail and use language that is 

reasonably understandable to the FICU’s 

member-owners in describing its 

strategies for filling vacancies and for 

recruiting, developing, and retaining 

employees.’’ 33 The preamble further 

provided that succession plans should 

be ‘‘clearly and concisely written, use 

everyday language to the extent 

possible, and avoid ambiguous phrasing 

open to differing interpretations.’’ 34

Several commenters wrote that this 

language implies the succession plans 

will be publicly available, which raises 

privacy concerns. The commenters 

wrote that the succession plans may 

include retirement information for 

senior credit union management, which 

should not be made public. Another 

commenter wrote that succession plans 

often reflect a FICUs strategy for 

maintaining viability in a competitive 

market. The public posting of plans 

would enable other financial 

institutions to access the information for 

competitive advantage or potential 

merger opportunities. 

NCUA Response. The Board again 

emphasizes that there is no requirement 

that succession plans be posted or 

otherwise made available to the public. 

Neither does the final rule supersede 

existing laws or FICU procedures 

governing the public dissemination of 

similar governance documents. The 

public availability of the succession 

plans should be treated similarly to 

such documents. The preamble 

language cited by the commenters was 

intended solely to emphasize the 

importance of clarity in drafting, 

especially in those circumstances where 

the plan, or portions thereof, may be 

made available to member-owners. 

H. Comments Regarding Specific Rule 

Provisions 

Comment: The scope of covered FICU 

officials should be narrowed. Many 

commenters recommended that the 

NCUA narrow the scope of the positions 

covered by the succession plans. The 

commenters wrote that the proposed list 

was overly prescriptive and would 

impose an undue burden to administer. 

Almost all of these commenters agreed 

the scope should be limited to those 

officials most directly responsible for 

ensuring the FICU’s continuity of 

operations but differed on the specific 

positions this would include. Some 

commenters suggested inclusion of the 

members of the board, the members of 

the supervisory and credit committees, 

and key management officials, including 

the chief executive officer. Other 

commenters suggested the scope be 

limited to the chief executive officer and 

chief financial officer (or equivalent), 

because the boards of directors are not 

involved in the FICU’s day-to-day 

operations. Still others suggested that 

the rule not include a specific list at all, 

but that FICUs should instead be 

provided with the flexibility to 

determine which critical positions 

should be included in a succession plan 

based on the specific risks associated 

with unanticipated or extended 

vacancies. 

Despite their differing 

recommendations, almost all the 

commenters writing on this topic 

suggested that loan officers and assistant 

managers be excluded from the list. 

Several of these commenters wrote that 

larger FICUs may have hundreds of loan 

officers involved in the daily review of 

loans. The commenters wrote that, given 

the decentralized lending structure of 

many large FICUs, there is likely 

minimal risk to the ability to serve 

members if a loan officer vacancy 

occurs. The commenters wrote the risk 

is even less for assistant management 

officials, who are not crucial to a FICU’s 

continuity of operations. 

NCUA Response. In response to these 

comments, the Board has removed loan 

officers, credit committee members, and 

supervisory committee members from 

the list of FICU officials that must be 

covered by the succession plans. During 

development of the July 25, 2024, 

proposed rule, the Board relied on the 

language of the FCU Act, the model FCU 

bylaws, and the definition of ’’ senior 

executive officer’’ in 12 CFR 701.14 as 

a guide in identifying the list of officials 

that should be covered by the 

succession plans.35 As it did in the 

preamble to the proposed rule, the 

Board emphasizes that succession plans 

are intended to cover senior leadership 

positions responsible for the oversight 

of the FICU or its day-to-day 

management.36 Upon consideration of 

the comments and the issues involved, 

the Board recognizes that loan officers 

and members of credit and supervisory 

committees may not always meet these 

criteria depending on the size and 

structure of a particular FICU. The 

change will enable FICUs to develop 

more appropriately tailored succession 

plans that better reflect their unique 

circumstances. 

As noted in a preceding response, 

FICUs may include within the scope of 

their plans ‘‘other personnel the board 

of directors deems critical given the 

[FICU’s] size, complexity, or risk of 

operations.’’ 37 FICUs should use the 

flexibility provided by this provision to 

assess whether the inclusion of loan 

officers and members of the supervisory 

and credit committees is appropriate 

given the institution’s characteristics. 

For example, a smaller FICU with few 

loan officers may deem the position 

critical given the impact a departure 

would have on the institution’s 

operations. In contrast, a larger FICU 

that employs many loan officers may 

determine its operations would not be 

impacted by the loss of any specific 

individual and choose to not include 

this position in their plan. 

Comment: The annual plan review 

requirement is excessive. Several 

commenters objected to the requirement 

that a FICU board review the succession 

plan ‘‘no less than annually.’’ 38 The 

commenters wrote that this requirement 

is burdensome and excessive. The 

commenters wrote that succession plans 

are not a dynamic and ever-evolving 

document and, therefore, should only be 

reviewed as needed. One of the 

commenters recommended that FICUs 

be provided the flexibility to review the 

plans once every 24 months. Another 

commenter suggested a review period of 

every three years. 

NCUA Response. Upon 

reconsideration, the Board agrees that 

the annual review of plans is 

unnecessary. The final rule now 

requires FICUs to review and update the 

plan as necessary but at least once every 

24 months. The Board believes this 

change provides FICUs with additional 

flexibility while still accomplishing the 


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39Proposed § 701.4(b)(3)(ii). 

goal of the rulemaking of ensuring that 

succession plans are regularly reviewed 

and kept current. 

Comment: Education requirements for 

FICU board members. Several 

commenters objected to the proposed 

regulatory language requiring that 

directors have a ‘‘working familiarity’’ 

with the FICU’s succession plan no later 

than six months after appointment.39

The commenters wrote that the focus of 

newly appointed directors should be on 

gaining familiarity with items such as 

the FICU’s operations, the products and 

services being offered, and applicable 

legal authorities. In contrast, a minority 

of commenters supported the 

requirement, writing that it is 

appropriate for boards to maintain a 

working knowledge of the latest 

developments in all of the areas of risk 

confronted by the FICU. 

NCUA Response. The Board has not 

revised the rule in response to these 

comments. The Board continues to 

believe that succession planning is one 

of the most vital responsibilities of a 

FICU’s board of directors. Succession 

planning is a critical component of a 

FICU’s overall strategic plan. It helps 

ensure that the appropriate personnel 

are available to execute the FICU’s 

strategic plan and mission. A board’s 

failure to plan for vacancies in elected 

and appointed positions, as well as the 

transition of its management, could 

come with high costs. The FICU runs 

the risk of creating a leadership vacuum, 

disrupting operations, and potentially 

jeopardizing the FICU’s ability to 

adequately manage liquidity risk, 

address cybersecurity threats, or ensure 

continued compliance with consumer 

protection, Bank Secrecy Act, and other 

critical responsibilities. Accordingly, 

and as recognized by the commenters 

writing in support of the requirement, 

succession planning merits inclusion 

among the items new board members 

must become familiar with. 

Comment: The ‘‘working familiarity’’ 

requirement is vague. Several 

commenters were concerned about a 

perceived lack of clarity with the 

proposed ‘‘working familiarity’’ 

language. The commenters wrote that, 

unlike the Board’s 2022 proposal, the 

proposed rule did not include language 

stating that training is not mandated to 

meet this requirement. The commenters 

wrote that it is unclear what steps a 

board of directors would be expected to 

take to achieve a ‘‘working familiarity.’’ 

The commenters were concerned this 

perceived ambiguity would leave the 

door open for differing practices among 

FICUs regarding training, as well as for 

different interpretations of the 

requirement between FICUs and 

examiners. They wrote that this could 

lead to inconsistencies in the 

examination process and urged the 

NCUA to clarify the meaning of the 

provision. 

NCUA Response. The Board has not 

revised the rule in response to these 

comments. The Board notes that the 

‘‘working familiarity’’ language is not 

new but comes from existing 

§ 701.4(b)(3). This existing regulation 

requires new credit union board 

members to gain a ‘‘working familiarity 

with basic finance and accounting 

practices’’ within six months of election 

or appointment. The final rule does not 

revise this language but adds succession 

planning to the list of items that 

directors must have a working 

familiarity with no later than six months 

after appointment. The final rule does 

not mandate the contents of training to 

meet this requirement. A FICU may 

incorporate succession planning into 

whatever materials it currently uses to 

comply with the education requirement. 

Comment: Deviations from succession 

plan. Several commenters wrote about 

potential deviations from the succession 

plan due to unforeseen circumstances. 

The commenters wrote that requiring 

documentation of such changes is 

overly prescriptive and sometimes not 

feasible given rapidly changing 

circumstances. Another commenter 

asked for additional clarity on the steps 

a FICU should take if it is unable to 

adhere to its succession plan, writing 

that the proposed rule lacked sufficient 

detail. 

NCUA Response. As provided in the 

preamble to the proposed rule, the 

Board recognizes that circumstances 

might necessitate deviations from the 

succession plan in filling specific 

vacancies. The final rule accommodates 

such exigencies. In the event exigent 

circumstances require a substantial 

deviation from the board approved plan, 

management and/or the FICU board has 

the flexibility to do what it deems 

necessary at the time, consistent with 

their fiduciary duties and legal 

responsibilities. To further emphasize 

this flexibility, the final rule no longer 

requires that such deviations be 

documented in the board’s meeting 

minutes. However, a substantial 

deviation from the approved plan 

should be reported to the board as soon 

as practicable. Credit unions, not the 

NCUA, are best positioned to assess 

various risks and exigent circumstances. 

The agency does not intend to 

micromanage deviations from 

succession plans made in response to 

exigent circumstances. Further, FICU 

boards have flexibility in determining 

how to calculate the required 24-month 

review period. A FICU may determine 

that the review of a succession plan 

necessitated by a change to address an 

exigent circumstance satisfies the 

required review, therefore restarting the 

24-month review cycle. 

I. Other Comments 

Comment: Exemption for high 

performing FICUs. One commenter 

suggested that the Board include an 

exemption for FICUs of all asset sizes 

with a CAMELS composite rating of 1 or 

2. The commenter wrote that bond 

requirements for FICUs vary by 

CAMELS rating, with a greater bond 

being required for CAMELS 3, 4, and 5 

rated FICUs due to the increased risk to 

the Share Insurance Fund. The 

commenter wrote that this logic should 

extend to succession planning as well. 

The commenter wrote that, at minimum, 

the final rule should establish such an 

exemption for FISCUs with a CAMELS 

composite rating of 1 or 2 because the 

NCUA is not the primary federal 

regulator for FISCUs. The commenter 

wrote that, given the lower risk to the 

Share Insurance Fund, the NCUA does 

not have as much standing to issue 

regulations covering FISCUs ‘‘when it is 

not necessary, but only a best practice.’’ 

NCUA Response. The suggestion 

made by the commenter is outside the 

scope of the proposed rule. The Board 

did not propose or seek public comment 

on a class-based exemption of this type. 

Accordingly, the Board has not revised 

the rule in response to this comment. As 

discussed, the Board believes that 

having clearly articulated, consistent, 

and enforceable succession planning 

requirements will benefit all FICUs, 

irrespective of asset size and CAMELS 

rating. Moreover, the establishment of a 

succession plan in advance of a FICU 

potentially becoming a composite 

CAMELS code 3, 4, or 5 will allow the 

FICU’s leadership to remain focused on 

the most pressing problems that led to 

the downgrade. 

Comment: Additional resources are 

necessary to aid compliance. Several 

commenters wrote that FICUs would 

require additional resources to comply 

with the succession plan requirements. 

While the majority of these commenters 

focused on the challenges faced by 

smaller FICUs, others wrote that all 

FICUs, irrespective of size, would 

require assistance. The commenters 

suggested the NCUA develop a broad 

range of resources to assist all FICUs in 

developing succession planning. One 

commenter recommended that the 

NCUA work with state supervisory 

authorities to develop recruitment 


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40 5 U.S.C. 601 et seq. 

41 5 U.S.C. 605(b). 

42 80 FR 57512 (Sept. 24, 2015). 

43Supra, note 15. 

44Public Law 104–121, 110 Stat. 147 (1996). 

45 5 U.S.C. 551. 

46 44 U.S.C. 3501–3520; 5 CFR part 1320. 

strategies and resources to assist FICUs 

in developing and implementing their 

succession plans. 

NCUA Response. As discussed, the 

NCUA makes available several resources 

to aid FICU succession planning efforts, 

including online training. The Board 

has also developed a sample template 

for a succession plan that may be 

appropriate for some FICUs. Smaller 

FICUs with less than $100 million in 

total assets and minority depository 

institutions of all sizes may also be 

eligible for assistance in a variety of 

areas, including succession planning, 

through the agency’s Small Credit 

Union and Minority Depository 

Institution Support Program. FICUs 

with a low-income designation may be 

able to apply for technical assistance 

grants to support succession planning or 

offset training costs through the 

Community Development Revolving 

Loan Fund. 

Comment: Additional clarity required 

regarding examination expectations. 

Several commenters wrote that the 

proposed rule was unclear about the 

potential impact on a FICU if an 

examiner determines a succession plan 

to be inadequate. The commenters urged 

the NCUA to clarify the expectations of 

the examination program to ensure 

consistency in evaluations of FICU 

regulatory compliance. The commenters 

also suggested that the final rule should 

identify a reasonable timeline for 

remediation should a FICU’s succession 

plan be deemed inadequate. 

NCUA Response. The expectation is 

for a FICU to develop a succession plan 

that meets the regulatory requirements 

and is consistent with the FICU’s size 

and complexity. Potential examination 

actions due to inadequate succession 

plans and possible remediation 

timelines are outside the scope of this 

rulemaking. As is current practice, 

examiners will use discretion and 

judgment when working with FICUs to 

remedy a potential negative finding 

before issuing documents of resolution 

or other negative findings. The NCUA 

may, in its discretion, issue guidance on 

the topic of succession planning as it 

deems necessary. 

III. Regulatory Procedures 

A. Regulatory Flexibility Act 

The Regulatory Flexibility Act 40

generally requires an agency to conduct 

a regulatory flexibility analysis of any 

rule subject to notice and comment 

rulemaking requirements, unless the 

agency certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities. If 

the agency makes such a certification, it 

shall publish the certification at the 

time of publication of either the 

proposed rule or the final rule, along 

with a statement providing the factual 

basis for such certification.41 For 

purposes of this analysis, the NCUA 

considers small credit unions to be 

those having under $100 million in 

assets.42 The Board fully considered the 

potential economic impacts of the 

regulatory amendments on small credit 

unions. 

The final rule requires that a FICU 

board of directors establish, and comply 

with, a written succession plan that 

addresses certain specified positions 

and contains specified elements. In 

addition, the board of directors will be 

required to review the succession plan 

no less than every 24 months. These 

requirements may impose some cost on 

FICUs. However, the NCUA believes 

several factors mitigate the potential 

costs, especially for small FICUs with 

assets of less than $100 million. 

First, a FICU is expected to develop 

a succession plan that is consistent with 

its size and complexity. Therefore, small 

FICUs may have a simple succession 

plan that is less costly to prepare than 

would be the case for larger and more 

complex FICUs. Further, in recognition 

that smaller FICUs may lack the 

resources or expertise to develop 

succession plans, the Board is providing 

a sample template for a simple 

succession plan that may be appropriate 

for these FICUs. The Board is also aware 

that many FICUs, including small 

FICUs, have already adopted succession 

plans. Many of these existing plans 

should already address, either partially 

or in their entirety, the elements that 

would be required by the proposed rule. 

This could minimize the burden of 

complying with the new requirements. 

In response to comments, the Board 

has narrowed the list of FICU officials 

that must be covered by the succession 

plans. This should further minimize 

burden by enabling FICUs to develop 

more tailored succession plans that 

reflect their unique circumstances. 

Further, the Board is delaying the 

effective date of the final rule until 

January 1, 2026, which will provide 

additional time to make any operational 

changes or resource allocations 

necessary for development of the 

succession plans. 

The NCUA also offers training and 

other resources to aid credit unions in 

developing their succession plans. For 

example, the NCUA has posted a video 

series on succession planning on the 

internet. The NCUA’s Small Credit 

Union and Minority Depository 

Institution Support Program is an 

available succession planning resource 

for FICUs with less than $100 million in 

total assets and minority depository 

institutions of any size. Smaller FICUs 

are also encouraged to seek assistance 

from larger or more sophisticated FICUs 

in the development of the required 

succession plans.43 FICUs may also use 

already existing information in 

preparing their plans, such as the data 

used to develop the recommended 

program to prepare for a catastrophic 

act. These resources should further 

reduce the costs of preparing the 

succession plans. 

Accordingly, the NCUA certifies the 

final rule will not have a significant 

economic impact on a substantial 

number of small credit unions. 

B. Small Business Regulatory 

Enforcement Fairness Act/ 

Congressional Review Act 

The Small Business Regulatory 

Enforcement Fairness Act of 1996 

(SBREFA) 44 generally provides for 

congressional review of agency rules. A 

reporting requirement is triggered in 

instances where the NCUA issues a final 

rule as defined by section 551 of the 

Administrative Procedure Act.45 An 

agency rule, in addition to being subject 

to congressional oversight, may also be 

subject to a delayed effective date if the 

rule is a ‘‘major rule.’’ The NCUA does 

not believe this rule is a ‘‘major rule’’ 

within the meaning of the relevant 

sections of SBREFA. 

As required by SBREFA, the NCUA 

has submitted this final rule to OMB for 

it to determine if the final rule is a 

‘‘major rule’’ for purposes of SBREFA. 

The NCUA also will file appropriate 

reports with Congress and the GAO so 

this rule may be reviewed. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

(PRA) applies to rulemaking in which 

an agency creates a new or amends 

existing information collection 

requirements.46 For purposes of the 

PRA, an information collection 

requirement may take the form of a 

reporting, recordkeeping, or a thirdparty disclosure requirement. The 

NCUA may not conduct or sponsor, and 

the respondent is not required to 

respond to, an information collection 


ddrumheller on DSK120RN23PROD with RULES1
104876 Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Rules and Regulations 

47Public Law 105–277, 112 Stat. 2681 (1998). 

unless it displays a valid OMB control 

number. 

The final rule establishes new 

information collections in the form of 

succession policies and plans. The 

NCUA estimates a total annual burden 

of 46,750 hours as follows: 

Estimated PRA Burden 

• OMB Control Number: 3133–NEW. 

• Title of Information Collection: 

Succession Planning. 

• Estimated number of respondents: 

4,499. 

• Estimated number of responses per 

respondent: 1. 

• Estimated total annual responses: 

4,499. 

• Estimated total annual burden 

hours per response: 10. 

• Estimated total annual burden 

hours: 44,990. 

The NCUA addressed comments on 

the proposed PRA burden estimate 

under section II. Discussion of Public 

Comments. In accordance with the PRA, 

the information collection requirements 

included in this final rule have been 

submitted to OMB for approval under 

control number 3133–NEW. 

D. Executive Order 13132 on Federalism 

Executive Order 13132 encourages 

independent regulatory agencies to 

consider the impact of their actions on 

state and local interests. The NCUA, an 

independent regulatory agency as 

defined in 44 U.S.C. 3502(5), voluntarily 

complies with the executive order to 

adhere to fundamental federalism 

principles. This final rule applies to 

FCUs and to FISCUs. By law, FISCUs 

are already subject to numerous 

provisions of NCUA’s rules, based on 

the agency’s role as the insurer of 

member share accounts and the 

significant interest NCUA has in the 

safety and soundness of their 

operations. The rulemaking may, 

therefore, have an occasional direct 

effect on the states, the relationship 

between the national government and 

the states, or on the distribution of 

power and responsibilities among the 

various levels of government. 

E. Assessment of Federal Regulations 

and Policies on Families 

The NCUA has determined that this 

final rule will not affect family wellbeing within the meaning of Section 654 

of the Treasury and General 

Government Appropriations Act, 

1999.47 The regulatory requirements are 

exclusively concerned with succession 

planning policies of FICUs for replacing 

vacancies among board members and 

other key management officials. While 

the final rule is intended to maintain 

access to quality credit union services 

by reducing unplanned or forced 

consolidations, the potential positive 

effect on family well-being, including 

financial well-being is, at most, indirect. 

List of Subjects 

12 CFR Part 701 

Credit, Credit unions, Reporting and 

recordkeeping requirements. 

12 CFR Part 741 

Bank deposit insurance, Credit, Credit 

unions, Reporting and recordkeeping 

requirements. 

By the National Credit Union 

Administration Board, this 17th day of 

December 2024. 

Melane Conyers-Ausbrooks, 

Secretary of the Board. 

For the reasons stated in the 

preamble, the NCUA Board amends 12 

CFR parts 701 and 741, as follows: 

PART 701—ORGANIZATION AND 

OPERATION OF FEDERAL CREDIT 

UNION 

■ 1. The authority citation for part 701 

continues to read as follows: 

Authority: 12 U.S.C. 1752(5), 1755, 1756, 

1757, 1758, 1759, 1761a, 1761b, 1766, 1767, 

1782, 1784, 1785, 1786, 1787, 1788, 1789. 

Section 701.6 is also authorized by 15 U.S.C. 

3717. Section 701.31 is also authorized by 15 

U.S.C. 1601 et seq.; 42 U.S.C. 1981 and 3601– 

3610. Section 701.35 is also authorized by 42 

U.S.C. 4311–4312. 

■ 2. Amend § 701.4 by: 

■ a. Revising paragraph (b)(3). 

■ b. Adding paragraph (e). 

The addition and revision to read as 

follows: 

§ 701.4 General authorities and duties of 

Federal credit union directors. 

* * * * * 

(b) * * * 

(3) At the time of election or 

appointment, or within a reasonable 

time thereafter, not to exceed six 

months, have at least a working 

familiarity with, and to ask, as 

appropriate, substantive questions of 

management and the internal and 

external auditors of: 

(i) Basic finance and accounting 

practices, including the ability to read 

and understand the Federal credit 

union’s balance sheet and income 

statement; and 

(ii) The Federal credit union’s 

succession plan established pursuant to 

paragraph (e) of this section. 

* * * * * 

(e) Succession planning requirements. 

(1) General. A federal credit union must 

establish a written succession plan as 

provided in this paragraph that is 

approved by the board of directors and 

consistent with the credit union’s size 

and complexity. In evaluating whether a 

succession plan meets the requirements 

of this paragraph, the NCUA will 

consider the size of the federal credit 

union, as well as the complexity and 

risk of its operations. 

(2) Covered positions. The succession 

plan shall, at a minimum, cover the 

following positions, or their equivalent 

if the federal credit union has adopted 

different position titles: 

(i) Members of the board of directors; 

(ii) Management officials and assistant 

management officials, as those terms are 

defined in Appendix A, if provided for 

in the federal credit union’s bylaws, 

and, to the extent not already covered, 

the senior executive officers identified 

in § 701.14(b)(2); and 

(iii) Any other personnel the board of 

directors deems critical given the 

federal credit union’s size, complexity, 

or risk of operations. This includes new 

positions that may be required due to 

planned changes in operations, 

supervisory landscape, or corporate 

structure. 

(3) Contents of succession plan. The 

succession plan must, at minimum, 

contain the following information 

regarding each of the positions covered 

under paragraph (e)(2) of this section: 

(i) The title for each covered position 

and the expiration of the incumbent’s 

term (if serving in a term-limited 

capacity) or other anticipated vacancy 

date if known (such as the incumbent’s 

retirement eligibility date or announced 

departure date). 

(ii) The federal credit union’s plan for 

permanently filling vacancies for each 

of the positions. 

(iii) The federal credit union’s strategy 

for recruiting candidates with the 

potential to assume each of the 

positions.The strategy must consider 

how the selection and diversity of skills 

among the employees covered by the 

succession plan collectively and 

individually promotes the safe and 

sound operation of the federal credit 

union. 

(4) Board responsibilities. The board 

of directors must: 

(i) Approve a written succession plan 

that meets the requirements of 

paragraphs (e)(2) and (e)(3) of this 

section; and 

(ii) Review, and update as necessary, 

the succession plan in accordance with 

a schedule established by the board of 

directors but no less than every 24 

months. 


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Federal Register / Vol. 89, No. 247 / Thursday, December 26, 2024 / Rules and Regulations 104877 

PART 741—REQUIREMENTS FOR 

INSURANCE 

■ 3. The authority citation for part 741 

continues to read as follows: 

Authority: 12 U.S.C. 1757, 1766(a), 1781– 

1790, and 1790d; 31 U.S.C. 3717. 

■ 4. Add § 741.228 to read as follows: 

§ 741.228 Succession planning. 

Any credit union that is insured 

pursuant to Title II of the Act must 

adhere to the requirements in 

§ 701.4(b)(3) and (e) of this chapter, to 

the extent these regulatory provisions 

do not conflict with an applicable state 

requirement. 

[FR Doc. 2024–30449 Filed 12–23–24; 8:45 am] 

BILLING CODE 7535–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 71 

[Docket No. FAA–2024–2087; Airspace 

Docket No. 23–ANM–22] 

RIN 2120–AA66 

Establishment of Class E Airspace; 

Dubois, WY 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule. 

SUMMARY: This action establishes Class 

E airspace extending upward from 700 

feet above the surface at Dubois Airport, 

Dubois, WY, in support of the airport’s 

transition from visual flight rules (VFR) 

to instrument flight rules (IFR) 

operations. 

DATES: Effective date 0901 UTC, 

February 20, 2025. The Director of the 

Federal Register approves this 

incorporation by reference action under 

1 CFR part 51, subject to the annual 

revision of FAA Order JO 7400.11 and 

publication of conforming amendments. 

ADDRESSES: A copy of the Notice of 

Proposed Rulemaking (NPRM), all 

comments received, this final rule, and 

all background material may be viewed 

online at www.regulations.gov using the 

FAA Docket number. Electronic 

retrieval help and guidelines are 

available on the website. It is available 

24 hours each day, 365 days each year. 

FAA Order JO 7400.11J, Airspace 

Designations and Reporting Points, and 

subsequent amendments can be viewed 

online at www.faa.gov/air_traffic/ 

publications/. You may also contact the 

Rules and Regulations Group, Office of 

Policy, Federal Aviation 

Administration, 800 Independence 

Avenue SW, Washington, DC 20591; 

telephone: (202) 267–8783. 

FOR FURTHER INFORMATION CONTACT: 

Jeffrey Drasin, Federal Aviation 

Administration, Western Service Center, 

Operations Support Group, 2200 S. 

216th Street, Des Moines, WA 98198; 

telephone (206) 231–2248. 

SUPPLEMENTARY INFORMATION: 

Authority for This Rulemaking 

The FAA’s authority to issue rules 

regarding aviation safety is found in 

Title 49 of the United States Code. 

Subtitle I, Section 106, describes the 

authority of the FAA Administrator. 

Subtitle VII, Aviation Programs, 

describes in more detail the scope of the 

agency’s authority. This rulemaking is 

promulgated under the authority 

described in Subtitle VII, Part A, 

Subpart I, Section 40103. Under that 

section, the FAA is charged with 

prescribing regulations to assign the use 

of the airspace necessary to ensure the 

safety of aircraft and the efficient use of 

airspace. This regulation is within the 

scope of that authority as it establishes 

Class E airspace to support IFR 

operations at Dubois Airport, Dubois, 

WY. 

History 

The FAA published a notice of 

proposed rulemaking for Docket No. 

FAA–2024–2087 in the Federal Register 

(89 FR 71863; September 4, 2024), 

proposing to establish Class E airspace 

at Dubois Airport, Dubois, WY. 

Interested parties were invited to 

participate in this rulemaking effort by 

submitting written comments on the 

proposal to the FAA. One person 

submitted two similar comments in 

support of the airspace action. 

Incorporation by Reference 

Class E5 airspace designations are 

published in paragraph 6005 of FAA 

Order JO 7400.11, Airspace 

Designations and Reporting Points, 

which is incorporated by reference in 14 

CFR 71.1 on an annual basis. This 

document amends the current version of 

that order, FAA Order JO 7400.11J, 

dated July 31, 2024, and effective 

September 15, 2024. FAA Order JO 

7400.11J is publicly available as listed 

in the ADDRESSES section of this 

document. These amendments will be 

published in the next update to FAA 

Order JO 7400.11. 

FAA Order JO 7400.11J lists Class A, 

B, C, D, and E airspace areas, air traffic 

service routes, and reporting points. 

The Rule 

This action amends 14 CFR part 71 by 

establishing Class E airspace extending 

upward from 700 feet above the surface 

at Dubois Airport, Dubois, WY, in 

support of the airport’s forthcoming 

transition from VFR to IFR operations. 

This airspace extends 8.2 miles 

southeast and 4.5 miles north and 

northwest of the airport. The 

configuration is designed to contain 

departing and missed approach IFR 

operations until reaching 1,200 feet 

above the surface and arriving IFR 

operations below 1,500 feet. 

Regulatory Notices and Analyses 

The FAA has determined that this 

regulation only involves an established 

body of technical regulations for which 

frequent and routine amendments are 

necessary to keep them operationally 

current. It, therefore: (1) is not a 

‘‘significant regulatory action’’ under 

Executive Order 12866; (2) is not a 

‘‘significant rule’’ under DOT 

Regulatory Policies and Procedures (44 

FR 11034; February 26, 1979); and (3) 

does not warrant preparation of a 

regulatory evaluation as the anticipated 

impact is so minimal. Since this is a 

routine matter that only affects air traffic 

procedures and air navigation, it is 

certified that this rule, when 

promulgated, does not have a significant 

economic impact on a substantial 

number of small entities under the 

criteria of the Regulatory Flexibility Act. 

Environmental Review 

The FAA has determined that this 

action qualifies for categorical exclusion 

under the National Environmental 

Policy Act in accordance with FAA 

Order 1050.1F, ‘‘Environmental 

Impacts: Policies and Procedures,’’ 

paragraph 5–6.5.a. This airspace action 

is not expected to cause any potentially 

significant environmental impacts, and 

no extraordinary circumstances exist 

that warrant preparation of an 

environmental assessment. 

Lists of Subjects in 14 CFR Part 71 

Airspace, Incorporation by reference, 

Navigation (air). 

The Amendment 

In consideration of the foregoing, the 

Federal Aviation Administration 

amends 14 CFR part 71 as follows: 

PART 71—DESIGNATION OF CLASS A, 

B, C, D, AND E AIRSPACE AREAS; AIR 

TRAFFIC SERVICE ROUTES; AND 

REPORTING POINTS 

■ 1. The authority citation for 14 CFR 

part 71 continues to read as follows: 


ddrumheller on DSK120RN23PROD with RULES1