ALEXANDRIA, Va.(11/21/08)—Extraordinary economic times and an incumbent need to be proactive rather than reactive in credit union regulation spurred the National Credit Union Administration (NCUA) to approve an accelerated schedule for risk-based examinations. At its open board meeting Thursday, the NCUA approved a 12-month examination cycle, to supplant the current 18-month cycle. NCUA Executive Director Len Skiles, in presenting the plan to the board for consideration, said that more-frequent on-site reviews are warranted under the current economic upheaval in order to identify and mitigate safety and soundness concerns at an earlier stage. Earlier problem detection and earlier remedial action must go hand-in-hand, Skiles said, to potentially save the NCUA’s share insurance fund millions of dollars in addressing credit union problems. Skiles acknowledged that implementation of the accelerated exam schedule will be challenging and there is a cost associated with it, but he added that otherwise there was no downside to more frequent regulatory observations. Approximately $6.84 million has been budgeted for the program in 2009. The program authorizes 56 new positions, including 50 examiners, five supervisory examiners, and one human resource specialist. The hirings will occur throughout the year; therefore the NCUA equates the hiring to 45 new full-time equivalent positions. The focus of the program will be on states where market dislocations are the greatest. Under the approved rule, agency staff will present a written evaluation of and briefing on the 12-month program at the October 2009 NCUA open board meeting. Use the resource link below to access the NCUA regulation.