Financial services regulators have elevated succession planning from a recommended practice to a core safety and soundness expectation.
Financial services regulators have elevated succession planning from a recommended practice to a core safety and soundness expectation.
The rules and recommendations are different for banks and credit unions. Discover what’s required for your organization and strategies to consider to develop a beneficial succession plan.
Credit union succession planning requirements
For credit unions, the National Credit Union Association (NCUA) has finalized a rule effective January 1, 2026 requiring every federally insured credit union to:
- Adopt a board approved written succession plan,
- Review it at least every 24 months, and
- Have newly appointed directors gain working familiarity with the plan within six months.
The rule applies to federal and federally insured state-chartered credit unions (with deference to state law where non conflicting) and explicitly aims to reduce unplanned mergers tied to leadership gaps. Failure to meet the NCUA’s rule can lead to Documents of Resolution (DORs) and mandated corrective action, with the agency emphasizing robust succession programs are necessary to sustain independent operations and reduce forced consolidation.
Bank succession planning requirements
For banks, the Office of the Comptroller of the Currency’s Comptroller’s Handbook on Corporate and Risk Governance and the Federal Deposit Insurance Corporation’s Examination Manual frame succession planning as a board responsibility integral to management quality. Succession planning shortcomings can influence the management component of CAMELS and trigger supervisory actions, placing succession readiness squarely within governance, strategic risk, and operational resiliency assessments.
The regulatory impact of inadequate succession planning is tangible. For banks supervised by the OCC and FDIC, weak or informal plans can result in CAMELS management rating downgrades, matters requiring board attention, or enforcement if leadership continuity risks threaten safety and soundness.
What other financial services regulators require for succession planning
State regulators generally align to these interagency expectations, and while the Consumer Financial Protection Board doesn’t directly regulate succession planning, the agency’s consumer protection framework reinforces the need for stable, competent leadership across compliance and risk functions to manage downstream consumer law risk.
What job titles should be included in financial services succession planning?
Financial institutions should check their plans cover the right positions. Beyond the C suite (e.g., CEO, President, COO, CFO, CIO/CTO, CRO), plans should explicitly include risk and compliance leaders — chief compliance officer, BSA/AML officer, chief risk officer (if not already in C suite), chief information security officer/cyber leader, chief audit executive/internal audit, and other control function heads —as well as chief credit officer, controller/treasurer, head of retail/consumer banking, head of commercial/lending, operations/payments leader, and business continuity/disaster recovery owner.
For credit unions, the NCUA rule requires coverage for board members, management officials/assistant management officials, senior executive officers, and any other personnel the board deems critical given size, complexity, or risk.
Strategies for financial services succession planning
Strategies to meet these expectations and reduce risk include:
Create a written plan
Make a comprehensive, written plan identifying critical roles, profiles role specific competencies, names or pipelines potential successors, and contingency procedures for sudden departures.
Incorporate succession planning with board governance
Embed succession planning into board governance, making it a standing agenda item with documented reviews on the cadence regulators expect. Banks should review this at least annually. NCUA requires credit unions to review it at least every 24 months.
Develop future leaders
Invest in leadership development and data, using skills inventories, demographics, and retirement eligibility to target development plans and address gaps across risk, compliance, cyber, and operations — and maintaining exam ready documentation.
Succession planning checklist
Consider the following checklist to help you get started:
- Written plan approved by the board covers C suite, risk/compliance (CCO, BSA/AML, CRO, CISO), audit, credit, technology, operations, and board positions (for credit unions).
- Review cadence documented (banks: at least annually; credit unions: at least every 24 months per NCUA) and reflected in board minutes.
- Contingency protocols for sudden vacancies (interim designees, decision rights, communications). A process to address changes in timeframes requested by the incumbent position.
- Talent pipeline with development plans and measurable milestones for identified successors.
- Alignment with OCC/FDIC governance standards and NCUA rule; confirm any state specific requirements.
- Exam-ready evidence: plan version control, training/mentoring records, competency assessments, and updates tied to strategy and risk appetite.
How CLA can help financial institutions with succession planning
CLA has helped many banks and credit unions establish succession plans. The earlier you start on your plan, the better your business outcomes tend to be. Explore more in our Owner Legacy Webinar series or get started on your plan today.