Just yesterday, the NCUA announced its new, streamlined charter system for Phase 1 of new credit union applications. This change is part of a larger project designed to make the entire chartering process much easier for applicants, thus resulting in more credit union charters as a whole. The NCUA approved a $2 million budget to develop this new chartering system at the end of last year, which will go toward not only making the process simpler, but also automating and moving the entire process online as well.

Industry professionals have insisted for years that the current chartering system is far too complex and demanding, asking more of any potential de novo credit union than should be necessary. The paperwork and capital requirements have prevented new credit unions from opening during a time when the industry is witnessing dwindling credit union numbers, thanks to mergers. Therefore, this news is long-awaited and will hopefully allow for more de novo credit unions to form in the coming years.

Speaking on the update, NCUA Chairman Kyle Hauptman reaffirmed his commitment to the new system. “Chartering remains one of my highest priorities,” said Hauptman. “Streamlining and systematizing the chartering process, as well as reducing unnecessary requirements, represents meaningful progress in easing the burden on organizers who want to establish a new credit union. Anyone who seeks to form a credit union should have a fair and accessible opportunity to do so.”

While only Phase 1 has been updated so far, the NCUA has stated that they are currently working on streamlining the other phases. Until then, credit unions can view the streamlined Phase 1 system for new charter applications on the NCUA’s website. The NCUA is expected to debut the new, automated chartering system in 2027.