WASHINGTON–NAFCU and CUNA have outlined ways they believe NCUA can improve its examination and supervision processes.
In a letter from the association’s Senior Regulatory Affairs Counsel Michael Emancipator said NAFCU “believes the agency can do more to decrease the exam burden for low-risk, well-run credit unions that have a long history of being safe and sound.”
Emancipator said the most common issues with the exam process include:
- Examiners relying too heavily on nonpublic guidance in lieu of regulatory requirements.
- Absence of sufficient notice.
- Lack of consistency.
Emancipator stated in the letter that a better-designed appeals process would address many credit unions’ examination concerns. While NCUA already has an appeals process in place, “NAFCU has heard that many members do not believe the process will yield results, and therefore do not even start the process,” he said. He said other credit unions are “fearful of potential retaliatory actions.” Emancipator reiterated NAFCU’s call for an independent appeals process free from examiner retaliation.
CUNA’s letter, signed by Senior Director of Advocacy and Counsel Lance Noggle, emphasized, among many points, some specific long- and short-term goals:
The letter stated that “NCUA can fully implement three important supervisory changes by the 2017 examination cycle. These changes could include:
- Extending the examination cycle;
- Right-sizing the examination staff; and
- Eliminating duplicative and overlapping exam procedures with state chartered examinations by enhancing coordination with state supervisory authorities.”
NCUA should begin its long-term supervisory improvement process by adopting principles to guide the agency’s efforts, Noggle said. “While the agency should develop these principles now, it should not race to adopt any specific idea at the expense of future flexibility. We suggest three important principles the agency should consider as it reviews and designs a new supervisory scheme:
- Improve the data and information collected from credit unions;
- Decrease the burden on credit unions from the supervisory process; and
- Continue to improve the efficiency of the examination process with the goal of reducing resources needed to supervise credit unions.”