Credit Union Exam Solutions Presents With Flying Colors

"Liquidity Management: Reading Between the Lines of NCUA's Latest Guidance"In this insightful episode, Mark Treichel and former NCUA Capital Markets Specialist Todd Miller analyze NCUA's April 2023 liquidity webinar and provide their expert take on the agency's current perspective on liquidity management.Episode Highlights:Todd Miller shares his 34-year experience at NCUA, including his roles as a regional capital market specialist and director of special actionsKey liquidity guidance documents discussed: 2010 Interagency Policy Statement on Funding and Liquidity Risk Management, 2013 CU 10 guidance on Regulation 741.12, and the 2023 addendum on contingency funding plansAnalysis of credit union deposit composition changes: from 55% in money markets, CDs, and wholesale funding in 2009 to 52% currentlyDiscussion of "reversion to the mean" in deposit mix and how credit unions have adapted to the rate environmentExamination inconsistencies: varying liquidity ratios and expectations from examiner to examinerThe importance of forward-looking liquidity management versus "rear-view mirror" approachesDisconnect between NCUA's public statements (e.g., "supervisory test is not how credit unions should manage interest rate risk") and examiner actionsHow improved analytics allow credit unions to operate with lower cash holdings while still managing risk effectivelyThe appropriate use of wholesale funding, borrowings, and non-member deposits in liquidity managementWhy well-capitalized credit unions with good asset quality will generally maintain access to liquidityResources Mentioned:2010 Interagency Policy Statement on Funding and Liquidity Risk Management2013 CU 10 guidance on NCUA Regulation 741.122023 addendum to the 2010 interagency statement on funding and liquidity riskIf you're concerned about your credit union's next NCUA exam, visit marktreichel.com to learn how Credit Union Exam Solutions can help you navigate the examination process successfully.

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/https://ncua.gov/newsroom/press-release/2025/hauptman-announces-changes-ncuas-overdraftnsf-fee-collectionA great Monday at GAC .... listen for details.

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/NCUA Board focuses on staff morale and safety of deposits.  Also what happened to the item making Todd Harper Vice Chairman??Listen and learn.

John McKechnie, a credit union policy expert and former NCUA insider, shares crucial insights about the looming regulatory shifts in Washington. He discusses the potential consolidation of regulatory agencies like the NCUA into a bank-dominated framework, raising alarms about the safety of credit unions. McKechnie also delves into the risks of losing tax exemptions, highlighting tensions between banks and ‘mega’ credit unions. Advocating for proactive measures, he emphasizes the importance of member engagement and advocacy to navigate these challenges.

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Have an LUA, or are you worried about getting one?  Don't miss this episode.

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/The Perfect Storm: Credit Risk and Modern Collections with David ReedIn this episode, Mark Treichel sits down with David Reed, of Reed & Jolly law firm, to discuss the pressing issue of credit risk and loan quality in credit unions. As a former in-house counsel and collections manager turned credit union attorney, Reed brings unique insights into modern collection challenges and solutions.Key Topics:Analysis of NCUA's 2024 Supervisory Priorities letter and its unprecedented focus on credit riskRecord-high delinquency rates in credit cards and used car loansThe need to modernize collection practices with new technology and communication methodsImportance of board reporting and corporate governance in managing credit riskBalancing member service with sound financial practices in today's economic environmentGuest: David Reed Contact: david@reedandjolly.com | 703-675-9578

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Show Notes: With Flying Colors - Interview with Mike Macchiarola of Olden LaneGuest: Mike Macchiarola, Olden Lane (broker-dealer and investment advisor serving credit unions)Key Topics Discussed:- Interest Rate Environment: Impact of "higher for longer" rates on credit unions, with industry cost of funds rising to 218 basis points- Regulatory Changes: Shift in regulatory focus under new NCUA leadership and potential Trump administration impacts- Consolidation Trends: Record year for credit union-bank transactions (22 in 2023) and increasing branch deal activity- Technology & AI: Growing importance of digital platforms while maintaining personal touch ("clicks and mortars")- Profitability Challenges: Industry ROA at 64 basis points with significant variance across institutions- Leadership Demographics: Addressing aging C-suite and board populations while attracting younger talent- Consumer Financial Health: Rising credit card delinquencies (11%) and increasing household debt levels- Fee Income: Evolving regulatory landscape around NSF and overdraft feesContact Information:- Website: www.oldenlane.com- LinkedIn: Mike Macchiarola- Email: Available through contact form on Olden Lane websiteNotable Quote: "If it don't make sense, it don't make dollars." - Mike Macchiarola on credit union profitability

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Press ReleasesSecretary Bessent Announces Intention to Appoint First Deputy Comptroller of the Office of the Comptroller of the CurrencyFebruary 7, 2025WASHINGTON – Secretary of the Treasury Scott Bessent today announced his intention to appoint Rodney E. Hood as a Deputy Comptroller and to designate him the First Deputy Comptroller of the Office of the Comptroller of the Currency (OCC). In this role, Mr. Hood will also serve as Acting Comptroller of the Currency.“The strong leadership and career experience of Rodney Hood will strengthen the OCC’s efforts to ensure the safety and soundness of the banking system while also enhancing economic growth," said Secretary Bessent.“I remain steadfastly committed to serving the American people and the banking system by creating a regulatory structure that fulfills our obligations, fosters innovation, and promotes financial inclusion, including those Americans who have been debanked and underserved,” said Mr. Hood.The OCC is a bureau within the Department of the Treasury, and the Comptroller of the Currency is appointed by the President with the advice and consent of the Senate. By statute (12 U.S.C. § 4), the Treasury Secretary is responsible for appointing up to four Deputy Comptrollers of the Currency and designating one as the First Deputy Comptroller. During a vacancy in the position of Comptroller, the First Deputy Comptroller possesses the powers and performs the duties of the office of Comptroller.Mr. Hood was previously confirmed by the U.S. Senate in 2005 and again in 2019 to serve on the National Credit Union Administration Board. In 2019, President Donald J. Trump designated him as Chairman of the NCUA Board.  Before entering public service, Mr. Hood held senior roles in retail finance, commercial banking, affordable housing, and community development at JPMorgan Chase, GE Capital, Bank of America, Wells Fargo, and North Carolina Mutual Life Insurance Company.A North Carolina native, Mr. Hood holds a bachelor’s degree from the University of North Carolina at Chapel Hill.

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Key Topics to Include:Economic data and analysisFinancial statement reviewKey performance/risk indicatorsLiquidity reportingInterest rate risk analysisInvestment portfolio oversightScenario testing and stress analysisModel validation and risk assessmentCredit risk integrationDocumentation and minutes

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Summary:In this special Archive episode of With Flying Colors, Mark explores the meaning and implications of "agreed upon corrective action" in credit union examinations. Drawing from his experience at NCUA, Mark explains how this term appears on examination reports and why its proper implementation is crucial for credit unions.Key Points Covered:Mark begins by breaking down the literal meaning of "agreed upon" using dictionary definitions, emphasizing that it means coming to a mutual arrangement or understanding. He shares a recent case where a small credit union reached out about their examination frustrations, highlighting how the agreed-upon process can sometimes break down.The Process:The examination report process typically includes a draft phase where credit unions can review and discuss findings with examiners. However, due to year-end pressures and internal goals, sometimes reports are finalized without proper consultation. Mark explains that the examination report's cover page explicitly states it should document "agreed upon corrective actions," making it important for credit unions to ensure they actually have input in this process.Recommendations for Credit Unions:Mark advises credit unions to push back when they don't receive proper opportunity for input. He suggests starting with the examiner, then moving up to the supervisory examiner if necessary. While NCUA has final authority on safety and soundness issues, credit unions should still receive the opportunity to influence report language to better serve their needs and their members' interests.Important Context:The podcast notes that NCUA implemented a higher level of review for examination reports, requiring supervisory review. While this creates more consistency, it can sometimes make immediate dialogue more challenging, especially when reports are delivered as final without prior discussion.Closing Thoughts:Mark emphasizes that credit unions must decide when to "go along to get along" versus when to advocate for changes. The goal should be finding language that satisfies both NCUA's safety and soundness requirements and the credit union's operational needs.Contact Information:Listeners can learn more about Mark's services at markteichel.com. The podcast releases new episodes once or twice weekly, providing expert insights on achieving success with NCUA.