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NCUA Holds Fourth Listening Session

Several credit union leaders who spoke at the NCUA “Listening Session” in Orlando, FL last week said they are seeing improvements with their examiners, although some concerns about the examination process remain. About 80 people attended the session; most were from Florida but credit unions from Alabama, Kentucky, South Carolina, North Carolina, and Ohio were among those attending. League representatives from area states also participated.

The final rule adopted by the NCUA Board in May on Troubled Debt Restructurings (TDRs) was commended and Chairman Debbie Matz said it was a “community effort,” acknowledging the work of CUNA, leagues and others to achieve a better result on the treatment of TDRs.

NCUA is rewriting its supervisory policy manual for examiners and hopes to have that issued to them in July. It is intended to result in consistency among the regions on supervisory issues. CUNA will be following up with NCUA on this and whether it helps improve how examiners approach issues with credit unions.

NCUA’s Director of Examination and Insurance Larry Fazio talked about developing a productive examination environment for credit unions and examiners. He urged credit unions to communicate regularly with their examiners and also with their supervisory examiner. Chairman Matz said that if credit unions have issues about their exam or with their examiner, they should not hesitate to try to work them out first with the examiner. If that is not successful, they should contact the supervisory examiner, and move up the chain of command if they feel their issues are not resolved. Improprieties should be referred to NCUA’s Inspector General.

Credit unions urged NCUA to provide greater opportunities for feedback to the agency following an examination, an objective CUNA has also advocated.

The agency will be sending information to about 1,100 credit unions next month that qualify for low-income designation but have not yet been formally designated as such. CUNA is developing a special report on the benefits of low-income designation which will be included in an upcoming Regulatory Advocacy Report.

The issue of distinguishing issues that may merit a DOR (document of resolution) from examiner findings that should not was also raised as well as lifting the current $10 million threshold for small credit unions.

Questions also arose about the NCUA’s Central Liquidity Fund and the agency’s request for comments earlier this year on the need for resources for emergency liquidity for credit unions when the need arises. CUNA has formed a Liquidity Task Force, chaired by Terry West, VyStar CEO, which will be meeting with NCUA this summer.

NCUA said it is also reviewing its rules to provide regulatory relief, including possibly in the area of MBLs, although it is clear that NCUA's authority to minimize requirements is limited. NCUA staff said they are also looking at investment rules to possibly provide more flexibility to credit unions and agency regulations on Prompt Corrective Action that could provide a greater risk-based focus. Mary Dunn represented CUNA at the meeting and talked with a number of credit union officials who attended about their issues and concerns. CUNA’s Examination and Supervision Subcommittee is meeting with NCUA’s Larry Fazio June 26 via telephone conference call.


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