ALEXANDRIA, Va.—During Thursday’s NCUA board meeting, the agency shared generally postiive feedback from its new post-examination survey, although the overall tone did not reflect some of the views that have been shared in other forums.
According to NCUA, the pilot survey, conducted from Sept. 20, 2021 to March 31, 2022, revealed few issues, with most of the 186 respondents answering favorably to questions asked in the poll (see below). The survey was sent to 1,058 credit unions and received a 17% response rate.
The one question receiving the lowest (61%) “yes” response, was, “A reference to the applicable law, NCUA Rules and Regulations, GAAP, or other binding standard or requirement was provided for all Document of Resolution items included in the final examination report.”
Two percent of respondents stated “no,” and 37% said the question was not applicable.
A Critical Role
NCUA stated the objective of the survey is to allow credit unions to provide timely feedback to the agency while helping to standardize the feedback process.
“The NCUA’s field examiners play a critical role in protecting credit union members, the system, and the National Credit Union Share Insurance Fund,” said Board Chairman Todd Harper. “Our examiners rely on training, experience, and, most importantly, good judgment when conducting examinations. In many ways, our examiners act like referees and umpires who must make calls on balls, strikes, fouls, and activities that are out of bounds. Being a referee is about fairness and making the right call. It is an often thankless and, at times, a difficult and disparaged job.”
Harper acknowledged there is a “perception” by some within the credit union industry of “inconsistency and micromanagement” in NCUA examinations.
“This perception is partly expected due to the nature of the examination process,” he said. “Nevertheless, the NCUA can and should seek to incorporate the feedback of credit unions and make appropriate improvements to the process.”
Survey to Continue
NCUA Thursday confirmed it is committed to continuing the post-examination survey, and that it will consider feedback from credit unions provided in the pilot. The agency also said it plans to streamline the survey and possibly incorporate it into the MERIT System.
Credit unions, and examiners, suggested NCUA add the following questions to future surveys:
- How did the examiner interact with staff and board of directors?
- Did the exam start and stop in a timely fashion?
- What could have been done better during the examination?
- Were there inefficiencies or difficulties with the offsite exam process?
- How was overall communication with examiners during the exam?
- Did the credit union find the examination useful? Was feedback helpful?
- Were the findings and plan for corrective action appropriate for the size and complexity of the credit union?
CU respondents also suggested NCUA add more qualitative questions to the survey and use a third-party to administer the report. NAFCU has noted it has asked the NCUA to implement an independent process to review examinations.
Years Of Frustration
Board Member Kyle Hauptman said the survey addresses “years of frustration” for him.
“In my prior job on Capitol Hill, it was difficult to solve problems between regulated entities and their regulators. Why? Because people were afraid to speak directly to their regulator, partly because the regulators didn’t appear to be particularly interested in feedback,” said Hauptman. “Constituents couldn’t notice that the regulator was doing all the normal, modern mechanisms to ensure quality service. Calls were not ‘monitored for quality assurance.’ There were none of the immediate feedback surveys that most organizations, including the regulated institutions, utilized daily to improve customer service. In most of the cases when I was on the Hill, the regulator felt everything was working just fine while the regulated institution was too afraid to tell them otherwise.”
Hauptman said such barriers make it harder to solve problems.
“The regulators often acted bewildered as to why these folks would talk to Congress but wouldn’t raise the issue directly with their regulator,” he said. “Anyone who doesn’t understand that reticence probably hasn’t worked at a regulated institution or, for that matter, been pulled-over by the police in the era before body-cameras.”
Hood: 'Greater Transparency'
Board Member Rodney Hood said the survey moves the agency one step closer to fostering even greater transparency between credit unions and NCUA.
“We owe it to (credit unions) to listen to their feedback, glean insights, and address their concerns,” Hood stated. “I am proud to say this survey fosters greater transparency.”