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CU READ exam survey finds new issues reg burden
HIGHTSTOWN, N.J. (12/11/12)--Credit unions continue to feel the resource strain from increased regulatory burdens, with many indicating they are seeing items show up in their Documents of Resolution (DOR)  that they have never seen before.  Those are two of the results of the Credit Union Regulatory Examination Assistance and Development (CU READ) survey of Region II credit unions.

The CU READ survey is a quarterly survey. The New Jersey Credit Union League conducted  first and second quarter regulatory and examination surveys on what credit unions experience during the exam process. The league's survey has since evolved to include other leagues from Region II (California/Nevada, Delaware, Maryland and District of Columbia, Pennsylvania, Virginia and West Virginia).

The CU READ survey is separate from a similar, national joint survey being conducted by the Credit Union National Association (CUNA) and the leagues to compile a complete picture of current examination processes and to assist them in honing advocacy efforts for credit unions before regulators on exam-related issues.

CU READ's third quarter findings for Region II focused on topics such as application of excessive DORs, the level of satisfaction with them, examiner time management issues and flexibility throughout the exam process. 

Survey respondents said that DORs continue to be heavier than in years past:

  • 64.4% of responding credit unions were presented with a DOR in their last exam.
  • 55.9% of respondent credit union leaders "strongly agree" and "agree" they are seeing items in their DORs that they have not ever seen before.
  • 54.6% indicated that they agree or strongly agree that items showing up in DORs (no evidence of violation of regulation/state or federal law) are much heavier than ever before.
  • 80.8% "strongly agree" and "agree" that heavier regulatory/exam requirements increased pressure on credit union resources.
National Credit Union Administration (NCUA) examiners scored high for professionalism and knowledge.

Exam positives included:

  • Examiners received high marks for professionalism and helpfulness, with both categories receiving a 45.8% ranking them as good and 33.7% ranking them as excellent;  44.6% said their examiner(s) were good in terms of fairness and 33.7% in objectivity.
  • 51.8% of respondents agree that examiner(s) were knowledgeable about the credit union and 57.8% about key Safety and Soundness issues and regulatory requirements.
In terms of exam length and scheduling issues:

  • 27.9% of respondents said their on-site exams lasted 13 days or more, while another 45.2% responded that their exam lasted exactly from four to nine days.
  • 48.1% of respondents strongly agree and agree that they have experienced examiners changing the exam date and time to accommodate the examiner's schedule.
The Region II leagues/associations will continue to collaborate and intend to produce a

CU READ 4th Quarter Survey to be released sometime in January 2013. At the state level, the NJ READ group will continue to communicate with NCUA to further facilitate positive change and implementation of solutions that make sense, said the New Jersey league.

In CU READ, "the crux of the survey is to utilize the results to work constructively with regulators on both how to improve the exam process and find areas ripe for regulatory relief, as well as give credit unions tools to deal with emerging issues," said New Jersey league President/CEO Paul Gentile. He noted this is "not a 'gotcha' tool against regulators. It's also helping us identify what is going very well in exams and could be broadened out."

The similar national CUNA/leagues survey is live online (use the link). The deadline for completing the survey is Dec. 15, but more time to complete and file may be made available to credit unions dealing with the holiday rush.

"Advocating on behalf of credit unions to improve the examination process is one of the highest priorities of both CUNA and the leagues," said CUNA President/CEO Bill Cheney. "A firm grasp of the current state of credit union examination process is needed to ensure that credit unions are effectively represented in discussions with the NCUA and state supervisory authorities."

The nationwide survey covers such topics as the length of the on-site exam, how satisfied the credit union was with the exam and results, and which problem areas, if any, were noted by the examiner. It also asks questions to gauge how the credit union perceived the examiner's performance and the exam process, and asks what are the biggest issues credit unions would like CUNA and their leagues to focus on to reduce reg compliance burdens.

The exam results will serve as a tool for CUNA and the leagues to work constructively with regulators on improving the examination process and ensuring consistency in how examiners apply regulations.
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