TL;DR

• What it is: NCUA’s January 2026 letter to federally insured credit unions, Letter 26-CU-01, names delinquency and loan loss as the sharpest risk examiners will look at this year.
• The headline fact: The letter states that the overall delinquency rate and rolling 12-month loss rate across credit union loan portfolios is at its highest point in over a decade.
• What examiners will check: The sufficiency of credit administration, meaning loan underwriting, loss mitigation programs, Allowance for Credit Loss reserves and methodologies, and charge-off practices.
• One caveat: This piece summarizes NCUA’s own letter. It is not a claim that NCUA endorses, requires or recommends any specific software vendor, including iTuring.ai.

A credit union does not get to choose whether delinquency becomes an exam topic this year. NCUA already decided that for every federally insured institution, in writing, at the start of the year. Letter 26-CU-01 names the number, states it plainly, and tells examiners where to look. This piece lays out exactly what the letter says, what “sufficiency of credit administration” means when an examiner tests it, and where a credit union’s existing loan monitoring is likely to fall short of that test.

What NCUA’s 2026 Letter Says About Delinquency

NCUA’s 2026 Supervisory Priorities letter opens its lending discussion with a number. Letter 26-CU-01, signed by Chairman Kyle S. Hauptman and issued in January 2026, states: “The overall delinquency rate and rolling 12-month loss rate within federally insured credit union loan portfolios is at its highest point in over a decade.”

That sentence sets the tone for everything under Balance Sheet Management, the letter’s first and largest priority category. The letter frames its approach as “No Regulation by Enforcement,” meaning examiners are not arriving to issue penalties for the number itself. They are arriving to test whether a credit union can show it is managing the number. The distinction matters operationally. A rising delinquency rate is not, on its own, an exam finding. An institution that cannot produce evidence of how it is tracking and responding to that rate is.

What Examiners Mean by Sufficiency of Credit Administration

The letter names four specific things examiners will review under credit administration, and none of them is a single document. NCUA states examiners will assess “the sufficiency of credit administration, including loan underwriting, loss mitigation programs (including loan modifications and workouts), Allowance for Credit Loss reserves and methodologies, and charge-off practices.”

Loan underwriting covers the standards a credit union applied when the loan was originated, and whether those standards held as conditions changed. Loss mitigation programs cover what happens once a borrower is already struggling, specifically whether modifications and workouts are structured, tracked and consistently applied across the portfolio with a written trail. Allowance for Credit Loss reserves and methodologies cover whether the reserve set aside for expected losses reflects the portfolio’s current risk, recalculated against this year’s numbers. Charge-off practices cover whether loans move off the books on a consistent, documented schedule, acted on once a reasonable loss estimate calls for it.

Why a Decade-High Delinquency Rate Changes What Examiners Ask For

A number this high changes the default assumption an examiner walks in with. In a calmer year, an examiner reviewing a loan portfolio starts from a baseline of general confidence and looks for exceptions. With delinquency and loss rates at a decade high across the sector, the baseline shifts. The examiner now expects the credit union to demonstrate control proactively, before being asked.

That shift shows up in the kind of evidence an examiner will accept. A quarterly delinquency report that lists past-due accounts after the fact answers the question of what happened. Under this letter, examiners are asking a different question: how the credit union identified a loan moving toward delinquency early enough to act, and what it did once that signal appeared. Static reporting and active monitoring produce different answers to that question, and only one of them satisfies a sufficiency review.

Where Prediction Fits Into Credit Administration Sufficiency

A model that scores loans by delinquency propensity gives credit administration a different kind of evidence to produce. A quarterly list of accounts already past due describes a loss that has already happened. A propensity model’s output is a ranked list of accounts moving toward delinquency, scored continuously against payment behavior, utilization and account history, with enough lead time for a loss mitigation conversation before the account reaches 30, 60 or 90 days past due.

This is the same mechanism iTuring.ai’s platform applies to deposit flight risk on the other side of the balance sheet: propensity-based scoring, outreach timed to the individual relationship, and continuous retraining on what outreach worked. Applied to lending, it gives loan underwriting a feedback loop on top of the static rulebook, and it gives loss mitigation programs a documented, consistent trigger in place of a judgment call made account by account.

Balance Sheet Management Covers Lending and Deposits Together

NCUA’s letter treats lending and deposit risk as parts of the same Balance Sheet Management priority. Delinquency pressure on the asset side and deposit concentration pressure on the liability side both erode the same thing: the credit union’s ability to meet its obligations without scrambling to cover them. An institution that can show early-warning visibility into loans moving toward delinquency, and the same visibility into large or rate-sensitive deposits that might leave, is answering the letter’s full question about balance sheet management, the lending half and the deposit half together.

We laid out the deposit side of that picture in Deposit Flight Risk: Seeing It Before the Quarter Closes, which covers the same propensity-and-outreach mechanism applied to large depositor relationships.

See how this applies to your loan portfolio

A conversation with our team walks through how propensity scoring and early-warning monitoring apply to your own loan book, using your own numbers. Book a working session.

Sources

• NCUA Letter 26-CU-01, “NCUA’s 2026 Supervisory Priorities,” issued January 2026, signed by Chairman Kyle S. Hauptman. Confirmed by direct fetch of ncua.gov.
• iTuring.ai Growth & Retention use case page, platform description of propensity scoring, personalized outreach and continuous retraining.