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News Now

Washington
Bill OKd by House would ease pressure on NCUA IG
WASHINGTON (7/31/09)--The House on Wednesday approved H.R. 3330, the “Improved Oversight by Financial Inspectors General Act,” which raises the trigger for financial institution investigations by federal regulators, including the National Credit Union Administration (NCUA). Specifically, NCUA Inspector General William DeSarno told News Now that the legislation would “amend the Federal Credit Union Act to raise the threshold” for material loss reviews (MLRs) to $25 million, up from the current $10 million threshold. The new threshold would apply to situations in which there were recorded losses equal to at least 10 percent of the total assets of the credit union at the time that the NCUA initiated assistance or was appointed as the liquidating agent of the credit union. DeSarno said that the bill would “alleviate some of the pressure” on the NCUA’s limited resources, as all of the agency’s audit resources are devoted to material loss reviews at this time. The legislation, introduced by Rep. Steve Driehaus (D-Ohio), would, according to a release, “help ensure that financial Inspectors General have the resources and flexibility they need to get to the bottom of the most significant failures in the financial sector.“ Current regulations require that Inspectors General to conduct MLRs of failed banks with material losses of at least $25 million, but the legislation would increase this threshold to $200 million for banks. However, inspectors would still be able to review banks that have reported smaller losses if they find that the bank has failed “due to unusual circumstances, such as fraud,” the release said.


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