The National Credit Union Administration (NCUA) Chairman Kyle S. Hauptman has issued a statement outlining the agency’s formal stance against regulation by enforcement. The policy, released on October 1, 2025, clarifies that the NCUA will not use enforcement actions to establish or clarify regulatory policy.

Chairman Hauptman said, “Today’s policy statement fulfills a goal listed back in January upon being designated as Chairman: ‘Codifying our procedures to protect Americans from regulation-by-enforcement. For example, no enforcement action should ever set―or even clarify― policy. In America and other free societies, the sequence is: set speed limits, then give speeding tickets (no one has any obligation to be aware of someone else’s ticket).’”

He emphasized that the agency already has a positive record in this area and that the new statement is not prompted by recent NCUA activities. “To be clear, this agency has a good track record regarding regulation-by-enforcement, so this statement shouldn’t be viewed as being the result of any recent NCUA actions. After all, it’s counterproductive for a deposit insurer to engage in regulation-by-enforcement against the same institutions we insure. That said, it’s important to put in writing a policy of fairness, whereby government employees give regulated credit unions the same due-process that they, under civil servant protections, rightly expect in their own careers. Today’s statement is born partly of my frustrating interactions with regulators, both in my time on Capitol Hill and in the private sector. I know that millions of others share the frustration of being told ‘if you want to figure out the rules, look at our prior settlements.’ Americans expect better from their government, including financial regulators.”

The No Regulation-by-Enforcement Policy Statement includes several key points:

- “Regulation-by-enforcement is unethical and not permitted at NCUA.”

- Enforcement actions are only taken for clear and significant violations of law or regulation.

- Regulated entities do not have an obligation to be aware of previous NCUA enforcement actions since no new policies are established through them.

- The timing or occurrence of enforcement actions should not be influenced by efforts to increase agency totals or meet fiscal year goals.

- Enforcement is described as a necessary tool but not an achievement or measure of success; resolving issues without resorting to enforcement action is preferred.

- The agency aims to avoid double standards by ensuring regulated entities receive due process similar to protections enjoyed by civil servants.

“If NCUA finds a harmful practice that threatens our mission or is otherwise injurious or abusive, and it is not currently addressed by law or regulation, then our next step is to consider rulemaking or other remedy. As is the norm in America, the sequence of events at NCUA is: 1) publish rules, 2) then (and only then) enforce them,” Hauptman stated.

The NCUA was established by Congress as an independent federal agency responsible for regulating and supervising federal credit unions. It manages the National Credit Union Share Insurance Fund which insures deposits for more than 143 million account holders across federal credit unions and most state-chartered credit unions.