ALEXANDRIA, Va.–The NCUA board has voted 3-0 to amend regulations governing the responsibilities of a federally insured credit union (FICU) when it comes to obtaining an annual supervisory committee audit.
The final rule, which seeks to update what the agency called “outdated” provisions of the regulation also provides added flexibility to federally insured credit unions with assets less than $500 million while continuing to ensure appropriate financial oversight, NCUA said.
The rule approved by the board:
- Replaces the 350-page Supervisory Committee Guide Audit alternative to a financial statement audit and replaces it with a simplified appendix to the regulation
- Eliminates two types of audits federally insured credit unions seldom use
- Eliminates the 120-day deadline for receiving a third-party audit report and gives credit unions the ability to negotiate a delivery date.
In cases where state charters are not required to have a supervisory or audit committee, the new rules makes very “explicit” the role of those CUs’ boards, NCUA staff said.
The final rule will become effective 90 days after publication in the Federal Register.
NCUA Chairman Rodney Hood called the changes made an example of NCUA’s “diligent andongoing approach to reviewing regulations and reducing burden.”
Hood said the changes make it easier for CUs to work with their preferred CPA firms.
CUNA said that NCUA simplifying the audit process with a "targeted list of procedures" can help credit unions.
"We’re pleased to see the NCUA recognize that burdensome and outdated regulatory guides impede swift and efficient credit union operations," said CUNA Chief Advocacy Officer Ryan Donovan.
The final rule can be found here.
NASCUS Response
Following the vote, NASCUS President Lucy Ito said, “NASCUS acknowledges NCUA’s efforts to provide federally insured credit unions with greater flexibility. As stated in our comment letter, we support replacing the NCUA Supervisory Committee Guide with the option to obtain an audit that meets stipulated requirements included in the new Appendix A to Part 715. However, we will closely examine the final rule to determine if it will lead to increased costs to credit unions. We continue to hold that an increase in costs must be justified by the supervisory value provided.”