By Doug Wadsworth
Small credit unions—hyper-local, member-owned cooperatives—serve underserved communities with personal service, better rates, lower fees, and loan approvals big institutions often deny. Yet their survival is in doubt.
Our January 2026 survey of 40 small CUs (75% under $100M in assets) reveals:
- Nearly 75% are not confident they will survive and thrive over the next 10 years.
- Nearly 20% of CEOs describe NCUA and DFI exams as “horribly frustrating and exhausting,” with the other 70% as also rating them as very difficult (but bearable, if they keep their heads down and don’t make waves).
- Top exam frustrations: excessive length, over-compliance pressure, and pointless checklists unrelated to safety/soundness.
If small CUs go extinct, the credit union movement’s tax-exempt status—rooted in our community-focused, not-for-profit identity—will be at serious risk.
Trade Associations: Words Must Become Action
Many trade associations and leagues rightly call small credit unions the “heart and soul” of the movement. We sincerely appreciate those making real progress: the Defense Credit Union Council and America’s Credit Unions are engaging more actively and providing valuable representation.
But small CUs need far more than appreciation and occasional attention. They need sustained, aggressive advocacy—political capital invested continuously to secure targeted regulatory relief the for our unique small CU burdens.
A Telling Example: Silence On A Small-CU-Friendly Proposal
The NCUA’s proposed rule on Supervisory Committee Audits and Verifications (docket NCUA-2025-1303-0001) would eliminate redundant, overly prescriptive requirements—streamlining controls, verifications, engagement letters, and reporting. It is one of the few recent NCUA initiatives that most directly benefits small CUs with limited staff and volunteers. Comments close Feb. 9, 2026.
My recent check of Regulations.gov showed only 17 supportive comments—16 from ESCUD-affiliated small CUs (after my personal outreach) and only one from an unknown small CU board member. Also, I have learned that America's Credit Unions and the Defense Credit Union Council are in the process of posting supportive comments (some just posted, others still pending).That is appreciated. We are hoping the Leagues will do the same, before the fast approaching expiration.
Silence on a proposal tailor-made for small credit unions is concerning—but it’s only a symptom.
The Broader Call: Prioritize Our Full Relief Agenda—Continuously
We ask that trade associations and leagues champion small CU priorities relentlessly, not just in isolated cases:
- Raise the outdated $10,000 CTR threshold under BSA
- Exempt small CUs from HMDA and NMLS reporting
- Provide CECL exemptions or significantly higher thresholds
- Allow a return to simple Gap Analysis (rather than complex and expensive ALM/NEV)
- Curb examiner over-compliance pressure and shorten exhaustive exams
- Reduce duplicative audits, pointless checklists, and excessive supervisory volunteer burdens
(See full priorities at www.endangeredsmallCUdefense.org/reg-relief-priorities )
We applaud DCUC and ACU for stepping up, and many leagues for beginning to wake up to this need. Now every trade organization must match words with consistent, high-priority action—submitting comments to this docket (and other future ones), as well as pushing our agenda in every legislative and regulatory forum, and fighting for exemptions that let small CUs focus on members, not paperwork.
Small credit unions are essential to the movement’s authenticity and future. Their survival depends on real advocacy, not assurances.
Doug Wadsworth is CEO of small Tri-Cities Community Credit Union in Kennewick, Wash. Wadsworth is also the president of a new non-profit advocacy group exclusively for small credit unions, the Endangered Small Credit Union Defense. He also will be serving on the new Small CU Advisory board of America’s Credit Unions in 2026. He can be reached at Doug@Tri-Citiescu.com or on LinkedIn here.