ALEXANDRIA, Va.—By a vote of 2-0, the NCUA board Thursday approved its 2017-2021 strategic plan, and in doing so emphasized its commitment to reducing the regulatory burden on CUs and possibly extending the exam cycle for well-run CUs. The new plan includes removing the calendar-year exam requirement.
In adopting the plan, the board retired two agency performance goals requiring the examination each calendar year of all federally insured, state-chartered credit unions with more than $250 million in assets and every federal credit union. The board then established an interim goal of completing an efficient and effective federal and state examination process through the end of 2016.
Board Chairman Rick Metsger noted that it is likely some exams scheduled for the end of the year will get pushed into Q1 2017 to not only reduce the year-end burden on CUs but examiners as well.
“Adoption of the strategic plan, and the accompanying motion to retire two existing performance goals from the performance plan will also help provide flexibility to our exam schedule, something I committed to in May,” said Metsger. “Our current rules overlay inflexible calendar-year requirements on top of a separate requirement that federal and state credit unions be examined every eight to 23 months.”
The “rigidity” of that requirement, said Metsger, “Forces us to cram examinations into the last couple months of the year when there may not be a safety and soundness need to do so. This also creates logistical problems for our staff, as well as issues for credit unions during a busy time of the year. This change will give our regions flexibility to schedule exams when they are needed and make the most sense, and not based on an arbitrary requirement.”
But Metsger emphasized that the new strategic plan does not extend the current exam cycle.
“Whether to change the exam cycle will be determined by the board after it receives recommendations from our Examination Flexibility initiative this fall,” said Metsger. “But this does give regions the ability to prioritize examinations based on risk and resources and not based on the calendar.
Metsger added that year-end exam schedules will be reviewed case-by-case.
“This may result in some exams scheduled for the fourth quarter to move into the first quarter of 2017,” said Metsger. “Regional directors will make those decisions on the best way to deploy our resources, and after consulting with state supervisors.”
Board Member Mark McWatters, supportive of the plan during the meeting, pointed out there was one “small bullet point” in the strategic plan that is very important to the future of the movement.
“It’s a small point, and easy to miss, but the plan says: ‘Support the success of small credit unions through the training, consulting grants . . .’ We are losing small credit unions about every business day,” said McWatters. “And I think agency should do its best to try to stop that. I was visiting a small credit union in North Carolina recently and the CEO said, ‘You know, I deal with members who are poor folk.’ Work with poor folk. That’s what small credit unions do. That is our mandate, supporting people of modest means—people striving to become middle income. Our Office of Small Credit Union Initiatives, to me, is the most important thing we do and I am glad this in is our strategic plan.”