Are NCUA’s Supervisory Priorities for 2026 Surprising?

By Jen Williams

February 17, 2026

While some are interpreting the NCUA’s 2026 supervisory priorities as a radical reorientation, risk-focused supervision has been consistent throughout the 2020s. There is a shift in fundamental tone as it relates to consumer compliance, but the core business of the NCUA and other banking regulators has not changed.

If you haven’t already seen NCUA’s Supervisory Priorities, let’s briefly review what credit union exams will be focused on in 2026. At first blush, the priorities are divided into two high-level sections—Balance Sheet Management and Operational Risk Management—with quite a few subcategories. That does not seem surprising given the current economic environment and trends in the financial industry. Regulatory uncertainty is a valid concern in the current climate, but it arguably has been for many years. On the face of it, it might appear that the industry can expect a move away from subjective examinations; but laws have grey areas and financial institutions (even while providing the same or similar products and services) have a diverse array of business models. There’s always been subjectivity as it relates to exams and enforcement. And that’s human nature—each examiner has a unique perspective since each has a different background and different experience.

So what can you actually expect?

More of the Same

As you read into the details of this year’s supervisory priorities, there are similarities from last year’s priorities and even past years’ supervisory priorities. Last year, there was quite a substantial focus on credit risk. In fact, credit risk has been included as a supervisory priority since 2020. Our current environment is one of elevated credit risk, interest rate volatility, and operational complexity, so it only makes sense. This year, the focus is lending, but the underpinnings are similar. Exams will be focused on underwriting, loss mitigation (including modifications and workouts), allowance reserves and methodologies, and charge-off practices. And, of course, portfolio monitoring and management, particularly related to credit risk and concentration risk, are included. Many credit unions rely on interest income to stay in business, and to stay true to the credit union purpose, so continued focus and thought about strategic risk-taking on credit remains valuable.

And Then Some

Additionally, this section elaborates on what the NCUA is now calling sensitivity to market risk and liquidity. IRR and liquidity, to the surprise of no one in the trenches at a credit union, are key areas of risk based management in the current rate environment. This is particularly true when coupled with repricing and balance sheet expansion. Balance sheet management is, of course, imperative. There is a certain dry, unintentional wit in the fact that it’s called a balance sheet, as if it’s a Zen-like manifesto for financial inner peace rather than a high-stakes accounting of every penny. Calling it a balance sheet is like naming a tightrope walk a “stability stroll.” But this is the expectation that financial institutions manage to.

It’s a little like the Barbie movie monologue: Earnings (also included in the supervisory priorities) need to be high, but not too high because then the credit union may not be returning enough value to the members or may be taking excessive risk. You need to make loans, but don’t make poor underwriting decisions or make too much of one loan type. And don’t lose focus on making sure members can get immediate access to funds and fund transfers because that’s table stakes (and a supervisory priority). But credit unions shouldn’t have fraud losses (a supervisory priority). Insurance companies are providing less and less coverage, the cost of good monitoring systems continues to increase, and third-party risks related to cybersecurity, confidential information, and general vendor management continue to get harder to manage. You must have a strong BSA program (also a supervisory priority), but make sure it fits the size and complexity of the institution. But if the credit union’s BSA program doesn’t have what the examiners are looking for, you’ll have to adjust it, even if the adjustments don’t fit the size and complexity.

It’s hard. It’s contradictory. And it’s all in the 2026 Supervisory Priorities. And has been the expectation of federal regulators from the beginning of time. Meet the new boss, same as the old boss.

In an environment defined by tradeoffs, we suggest our clients continue to exercise care and thought toward strategic decision-making. Document decisions and risk tradeoffs to help reassure regulators that the forethought and care was there. And then thoughtfully manage resources. All of this to stay relevant in a way that supports your credit union’s business model with your credit union’s risk appetite.

Easy, right?

About the Author

Jen Williams

Jen Williams, Of Counsel at SW&M, has an extensive legal background spanning over 20 years. She brings a wealth of expertise in the fields of general credit union law, mergers and acquisitions, field of membership (FOM) expansions and issues, foundation […]

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