NCUA headquarters. Credit/NCUA
In response to a sweeping executive order issued by President Donald Trump aimed at fighting regulatory overcriminalization, the NCUA has issued new guidance on when it will refer credit union violations for criminal enforcement.
Trump’s Executive Order 14294, signed May 9, directs federal agencies to scale back the use of criminal penalties for regulatory violations. It cites the “absurd and unjust” volume of federal regulations, of more than 175,000 pages, with many carrying criminal penalties that ordinary citizens may not even know exist. The order declares that criminal enforcement should be “disfavored” except in cases where a person knowingly violates the law or causes significant harm.
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In compliance, the NCUA’s notice, to be published in the Federal Register July 2, outlines its framework for criminal referrals. The agency will, by May 2026, submit to the Office of Management and Budget a list of all federal regulations it enforces that carry criminal penalties, along with the potential penalties and required state of mind (or mens rea) for each offense.
The NCUA’s policy emphasizes that criminal referrals should consider the severity of harm, the financial gain involved, the specialized knowledge of the offender, and whether there’s evidence the individual knew their conduct was unlawful.
“This framework doesn’t eliminate criminal enforcement but ensures it’s targeted at bad actors who knowingly violate the law, not ordinary credit union staff caught in complex rules,” the agency’s notice states.
The executive order and subsequent NCUA action reflect broader efforts to reduce what Trump calls “regulatory abuse” and to ensure fairness in how rules are enforced, particularly for small institutions like credit unions.
The guidance does not create any new rights or legal defenses but signals a shift toward restraint in criminal regulatory enforcement.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
