WASHINGTON (1/18/11)--As part of its comprehensive guidance to member credit unions regarding supervisory and examination trouble spots, the Credit Union National Association (CUNA), in conjunction with state league and credit union leaders, developed a Credit Union Bill of Examination Rights
. The document, though not legal advice, informs credit unions that in the examination process, they have the right to:
* Manage risk without being directed by examiners to eliminate it. * Respectful conduct from their examiner. * Be examined by well-trained, competent examiners who understand the unique characteristics of credit unions. * Meet and discuss examiner findings, conclusions, directives and administrative actions with the examiner. * Question, and seek corrections to, examiner findings, conclusions, and directives. * Provide alternative and/or additional data, conclusions, and solutions to address problems identified by the examiner. * Know the specific authority or legal basis for an examiner’s directive. * Receive clearly written examination reports, notices, etc., on a timely basis. * Receive exam reports, findings, directives, and administrative actions that are based on all relevant facts. * Be evaluated on their own strengths and weaknesses and not solely on the basis of regulator concerns about trends. * Be evaluated for progress toward objectives that are realistic and achievable, proportionate to the risk presented. * Examination findings and directives that are risk prioritized. * Appeal examiner findings, conclusions, or directives without retaliation from their regulator. * Have instructions on how to appeal, detailed on every exam report form provided to credit unions. * Record meetings with examiners and other agency personnel. * Have a representative, such as an attorney, present during meetings with the examiner and other regulatory personnel. * Have any published orders—such as consent orders—address only facts and not conjecture or speculation by the examiner. * Have confidential, non-discoverable communications with their legal counsel regarding examination issues. * Develop and use “high-level” policies, which should be separate and distinct from detailed procedures. * Have a lead examiner that is state or federal, consistent with the credit union’s charter type. * Know the timing of when NCUA will publish a Letter of Understanding and Agreement. * Defer to their CPA if there is a disagreement between the officials and their regulator regarding issues related to U.S. generally accepted accounting principles. * Have communication (i.e., discussion of draft findings) with their examiner prior to final issuance of the examination report. * Have directives from examiners (including verbal and written comments) be consistent with regulatory requirements, policies, and Letters to Credit Unions. For example, there were inconsistencies noted between how examiners treated the assessment’s effect on credit union earnings and an NCUA letter to credit unions on the subject.
The list of rights was developed in conjunction with CUNA’s extensive study of credit union frustrations with the examination process that resulted in a 64-page document providing guidance for CUNA member credit unions on examination and supervisory issues. (See related story: CUNA unveils extensive guidance on CU exam issues.)