Credit Union Exam Solutions Presents With Flying Colors
NCUA Changes Exam Frequency: Or Regulatory Theater?
Dec 9, 2024
Explore the recent changes in NCUA examination policies that could affect larger credit unions. Discover the operational workload implications and the critique of the NCUA's estimation methods. Delve into the skepticism surrounding upcoming budget approvals, questioning their real impact on credit unions. The discussion highlights potential systemic inefficiencies in regulatory processes, raising doubts about whether these changes are genuine improvements or mere public relations moves.
20:03
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Quick takeaways
- The NCUA's revised examination cycle permits an extended timeframe for well-performing credit unions, potentially alleviating their regulatory burden while still monitoring risks.
- Concerns regarding the NCUA's claimed exam hour savings highlight a disparity between reported efficiencies and the actual productivity of examiners.
Deep dives
Changes to Examination Cycles
The NCUA is shifting its examination cycle policies for credit unions with assets between $1 billion and $10 billion. Previously, these credit unions were required to be examined annually, but the new proposal allows a 12 to 16-month cycle if they maintain a strong performance (CAMEL codes of 1 or 2) and have the same CEO since their last exam. This shift potentially eases the examination burden for well-performing credit unions while ensuring that high-risk entities continue to be monitored closely. Additionally, credit unions below $1 billion will see a reduction in their examination relief, as their cycle will be trimmed from 14 to 18 months, reflecting a tightening of oversight in lower asset categories.
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