TEMPE, Ariz. (4/11/13)--The Northwest Credit Union Association and league presidents from across Region V joined other credit union leaders at the National Credit Union Administration regional office in Tempe, Ariz., Tuesday to discuss mutual concerns and advocate for changes. The meeting was part of a broad plan to modify the examination process for all credit unions, according to NWCUA.
Regional Director Liz Whitehead said exam examiners will be given guidance on how to use documents of resolution (DORs), examiner findings, and supplementary facts, and how to offer informal discussion items and general recommendations (Anthem Recap April 5).
Whitehead told advocates that DORs will be used only for issues that have the potential to cause the failure of the credit union. That clarification should significantly reduce how often they are used, said NWCUA Director of Regulatory Advocacy John Trull. The initiative will begin soon, and by year's end, credit unions can expect to see a more consistent approach, he added.
The region's credit unions also reported a combined 21% drop in the number of CAMEL 3, 4, and 5 credit unions for the year ending Dec. 31. Management is a leading indicator of how a credit union will do in challenging economic times, said Associate Regional Director Cherie Freed.
Gayle Gustafson, lending leader at Rivermark Community CU in Beaverton, Ore., and chair of the NWCUA's Regulatory Advisory Committee, asked what the regional office was doing to encourage innovation and risk-taking among credit unions. Region V senior management responded that examiners want to see that the credit union has done its due diligence and that it understands the risks associated with any new program.
A credit union should have policies and procedures in place that limit exposure and be able to answer examiners' questions related to risk. If an examiner expresses concerns, credit unions are encouraged to push back and ask for an explanation of the examiner's concerns, said Region V senior management.
"I remember a couple of years back when problems with troubled debt restructuring were the only topic of conversation," said Troy Stang, NWCUA president/CEO. "Now it has been addressed, and didn't even come up at the Region V meeting. These dialogues have led to beneficial changes. Next year, the overused Documents of Resolution will be a thing of the past."