Catastrophic Act Reporting

NATIONAL CREDIT UNION ADMINISTRATION <CFR>12 CFR Part 748</CFR> <RIN>RIN 3133-AF77</RIN> <SUBJECT>Catastrophic Act Reporting</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> National Credit Union Administration (NCUA). <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The NCUA Board (Board) is publishing this proposed rule to amend the requirements for federally insured credit unions (FICUs) to report catastrophic acts to the agency. By providing more time for FICUs to notify the agency of the occurrence of a catastrophic act and by eliminating the specific list of items to be documented, the Board expects the proposed rule to reduce the compliance burden and allow FICUs to focus their resources on recovery and core functions without compromising safety and soundness. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received on or before February 27, 2026. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Comments may be submitted in one of the following ways. (Please send comments by one method only): • <E T="03">Federal eRulemaking Portal: https://www.regulations.gov.</E> The docket number for this proposed rule is NCUA-2025-1437. Follow the “Submit a comment” instructions. If you are reading this document on <E T="03">federalregister.gov</E> , you may use the green “SUBMIT A PUBLIC COMMENT” button beneath this rulemaking's title to submit a comment to the <E T="03">regulations.gov</E> docket. A plain language summary of the proposed rule is also available on the docket website. • <E T="03">Mail:</E> Address to Melane Conyers-Ausbrooks, Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. • <E T="03">Hand Delivery/Courier:</E> Same as mailing address. Mailed and hand-delivered comments must be received by the close of the comment period. <E T="03">Public inspection:</E> Please follow the search instructions on <E T="03">https://www.regulations.gov</E> to view the public comments. Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publicly disclosed. All comments are public records; they are publicly displayed exactly as received, and will not be deleted, modified, or redacted. Comments may be submitted anonymously. If you are unable to access public comments on the internet, you may contact the NCUA for alternative access by calling (703) 518-6540 or emailing <E T="03">OGCMail@ncua.gov.</E> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Gira Bose, Senior Staff Attorney, at (703) 518-6540 or at 1775 Duke Street, Alexandria, VA 22314. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Introduction</HD> <HD SOURCE="HD2">A. Background</HD> Part 748 requires a FICU to notify the appropriate NCUA Regional Director within five business days of any catastrophic act that occurs at its office(s). NCUA regulations define a catastrophic act as “any disaster, natural or otherwise, resulting in physical destruction or damage to the credit union or causing an interruption in vital member services, as defined in § 749.1 of this chapter, projected to last more than two consecutive business days.”  <FTREF/> <SU>1</SU> The agency adopted this requirement under 12 U.S.C. 1785(e), which requires the agency to promulgate rules establishing minimum safety standards relating to security. <FTNT> <SU>1</SU>  12 CFR 748.1(b). <E T="03">See also</E> 12 CFR 749, App. B, Catastrophic Act Preparedness Guidelines. The NCUA has long required catastrophic act reporting. In 1970, Congress amended the Federal Credit Union Act (FCU Act) to require that the NCUA promulgate rules establishing minimum standards for the installation, maintenance, and operation of security devices and procedures to discourage robberies, burglaries, and larcenies. The 1970 amendment to the FCU Act also required the agency to adopt time limits for compliance and mandated the submission of periodic reports. <E T="03">See</E> 12 U.S.C. 1785(e) (Pub. L. 91-468) (84 Stat. 1002). Thus, since 1971, the NCUA has promulgated regulations requiring the submission of reports within five working days of an occurrence, or attempted occurrence, of a crime or catastrophic act. <E T="03">See</E> 36 FR 10940 (June 1, 1971). <E T="03">See also</E> 47 FR 17981 (Apr. 27, 1982); 50 FR 53295 (Dec. 31, 1985). </FTNT> In 2007, NCUA amended the definition of catastrophic act “to address concerns that relatively minor events could be construed to trigger the need to file a report and, also, clarifying the causal link between a disaster and an interruption in vital member services.”  <SU>2</SU> <FTREF/> The Board believed these changes to be “consistent with the usual and customary meaning of the word catastrophe.”  <SU>3</SU> <FTREF/> The Board stated, “[t]hese changes also reinforce the Board's view that the reporting requirement applies only to a disaster as opposed to a circumstance where physical damage or a business closing occurs but is not disaster-related.”  <SU>4</SU> <FTREF/> While natural disasters were the leading concern in the aftermath of hurricanes Katrina and Rita, the use of the phrasing “any disaster, natural or otherwise” in the definition of catastrophic act was meant to illustrate other events, such as a power grid failure or physical attack, for example, could have a similar impact on access to member services and vital records. <FTNT> <SU>2</SU>  72 FR 42271 (Aug. 2, 2007). </FTNT> <FTNT> <SU>3</SU>   <E T="03">Id.</E> </FTNT> <FTNT> <SU>4</SU>   <E T="03">Id.</E> </FTNT> <HD SOURCE="HD2">B. Legal Authority</HD> The Board is issuing this proposed rule pursuant to its authority under the Federal Credit Union Act (FCU Act). <SU>5</SU> <FTREF/> Under the FCU Act, the NCUA is the chartering and supervisory authority for federal credit unions (FCUs) and the federal supervisory authority for federally insured credit unions (FICUs). The FCU Act grants the NCUA a broad mandate to issue regulations governing both FCUs and FICUs. Section 120 of the FCU Act is a general grant of regulatory authority and authorizes the Board to prescribe regulations for the administration of the FCU Act. <SU>6</SU> <FTREF/> Section 209 of the FCU Act is a plenary grant of regulatory authority to the NCUA to issue regulations necessary or appropriate to carry out its role as share insurer for all FICUs. <SU>7</SU> <FTREF/> The FCU Act also includes an express grant of authority for the Board to subject federally chartered central, or corporate, credit unions to such rules, regulations, and orders as the Board deems appropriate. <SU>8</SU> <FTREF/> <FTNT> <SU>5</SU>  12 U.S.C. 1751 <E T="03">et seq.</E> </FTNT> <FTNT> <SU>6</SU>  12 U.S.C. 1766(a). </FTNT> <FTNT> <SU>7</SU>  12 U.S.C. 1789. </FTNT> <FTNT> <SU>8</SU>  12 U.S.C. 1766(a). </FTNT> <HD SOURCE="HD1">II. Proposed Rule</HD> The Board is proposing to further ease the reporting burden with the following amendments. First, the proposal would amend the regulation to require that credit unions notify “NCUA” rather than the specific “regional director.” This change is intended to modernize the reporting process and provide greater operational flexibility for both FICUs and the agency. By designating “NCUA” as the recipient, the agency can centralize and streamline the intake of these critical reports, ensuring they are routed efficiently to the appropriate personnel for response and monitoring. This change would remove the burden on a credit union, which may be operating under emergency conditions, to identify and direct its report to a specific regional office. Second, the proposal would extend the timeframe for submitting a catastrophic act report from “5 business days” to “15 calendar days.” The Board believes the current five-day deadline may be impractical for an institution recovering from a significant operational disruption. Extending the deadline to 15 calendar days provides credit union management with a more reasonable amount of time to stabilize operations, assess the full scope of the damage, and provide a more accurate report to the agency. This change acknowledges the significant operational challenges that follow a catastrophic act and would allow a credit union to prioritize recovery efforts over immediate administrative reporting. Finally, the Board proposes to remove the prescriptive list of items that a credit union should include in its internal record of a catastrophic act and replace it with a requirement that a credit union record the basic facts of the event. The current rule suggests documenting details such as the location, timing, loss amount, and potential operational deficiencies. While maintaining a record containing the basic facts of an event is a prudent business practice, the Board believes that specifying the exact contents of this internal record to the degree currently required is an unnecessary and overly prescriptive regulatory burden. FICUs already maintain records of such events as part of their own business continuity and disaster recovery planning. Removing the list of items in this sentence would reduce administrative overhead and allow FICUs the flexibility to document these incidents in a manner that best suits their operational and recordkeeping policies, while still ensuring a record is created and maintained. This change would also make the regulation clearer by removing a provision that is phrased as a suggestion and not a requirement with the use of the word “should.” Commenters are invited to provide feedback on these proposed changes to the catastrophic act reporting requirements. Specifically, the Board seeks feedba ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 19k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━