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NCUA flags new CU reg tools, exam improvements
WASHINGTON (1/9/13)--National Credit Union Administration (NCUA) efforts to provide meaningful improvements to examinations and reduce regulatory burdens on credit unions are welcome, Credit Union National Association (CUNA) Deputy General Counsel Mary Dunn said Tuesday.

In the January edition of The NCUA Report, Chairman Debbie Matz said, "The agency continues to study the examination program carefully, looking for ways to…ultimately reduce burdens on credit unions wherever we can, consistent with safety and soundness."

Dunn noted that efforts to relieve burdens and improve exams are consistent with CUNA's 2013 Regulatory Advocacy strategy. CUNA knows that a number of credit unions have continuing concerns about examinations, she added. "That's why we developed our national exam survey, and will also work throughout the year with our Examination and Supervision Subcommittee to gauge credit unions' reactions to NCUA improvements."

Chairman Matz said the NCUA board in 2013 will also explore the creation of additional regulatory tools to give credit unions more capacity to manage risk, like the use of derivatives to hedge interest rate risk, a move that CUNA strongly supports.

The NCUA Report article also said the agency is developing better training and guidance in several areas. Pre-exam letters will communicate additional information about the exam process, and exam report cover letters will outline exam appeal options that are available to credit unions.

The NCUA chairman also previewed areas that agency examiners will emphasize in 2013, including:

  • How well credit unions put risk management controls in place when expanding the use of technology like online banking and social media;
  • Whether credit unions are appropriately managing earnings and capital without adding undue levels of interest rate, liquidity and credit risk;
  • How well credit unions control operational risk and maintain sound internal controls; and
  • Whether credit unions are actively managing the unique risks associated with unconventional products, such as investments in credit union-funded benefit plans or private student loan programs.
More detail on these areas of exam emphasis will be provided in a January Letter to Credit Unions, Matz noted.

For the full January NCUA Report use the resource link.

Also, CUNA member credit unions can participate in the CUNA examination survey until Jan. 15. More than 1,100 credit union representatives already have responded to CUNA's survey to share the strengths and weaknesses of their state and federal examination experiences. CUNA will use the confidential survey information to inform its advocacy efforts on behalf of credit unions to improve the examination process.

CUNA members may use the resource link to take the survey.
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