Credit Union Exam Solutions Presents With Flying Colors

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Kyle S. Hauptman Designated as NCUA Board ChairmanALEXANDRIA, Va. (Jan. 22, 2025) – President Donald J. Trump has  National Credit Union Administration Vice Chairman Kyle S. Hauptman as the thirteenth Chairman of the NCUA Board.“I am deeply honored that President Trump has asked me to serve as Chairman of NCUA,” Chairman Hauptman said. “I look forward to leading the agency’s dedicated professionals and working with my Board colleagues to create a regulatory structure that promotes growth, opportunity, and innovation within the credit union system.“My priorities as Chairman include:Re-examining the current NCUA budgeting process.Convening groups of NCUA employees to identify achievable internal efficiencies to reduce unnecessary frictions in the agency’s operations.Promoting the appropriate use of artificial intelligence (AI) as a tool for NCUA employees. One goal is enhancing productivity, but it’s also true that regulators who use technologies are more apt to understand why the regulated use them.Focusing on true financial inclusion, which means removing barriers to de novo credit unions and removing the ‘pain points’ that have led to fewer and fewer small credit unions. NCUA should be mindful that the only people who think compliance is easy are those that don’t have to do it.Codifying our procedures to protect Americans from regulation-by-enforcement. For example, no enforcement action should ever set - even clarify - policy. In America and other free societies, the sequence is: set speed limits, then give speeding tickets (no one has any obligation to be aware of someone else’s ticket).Making clear that credit unions and their members are best positioned to assess their communities’ climate risks.Re-assessing NCUA policies that may, even inadvertently, dissuade credit unions from serving low-income areas. This includes language around overdraft policies, particularly for credit unions located in states with especially punitive government late fees/penalties.Right-sizing credit unions’ obligations where possible under the Bank Secrecy Act, including NCUA’s regulations surrounding Suspicious Activity Reports.”

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Episode Summary:In this episode of With Flying Colors, host Mark Treichel sits down with Steve Farrar, a former NCUA examiner and capital expert, to discuss the complexities of credit union capital management. With decades of experience, Steve shares insights into the evolution of capital regulations, the purpose of regulatory capital, and the challenges credit unions face in maintaining the right balance between risk and growth.Key Takeaways:Steve Farr’s Background: Steve shares his extensive career journey, from starting as an NCUA examiner in 1987 to becoming a key player in regulatory capital rulemaking.Purpose of Regulatory Capital: Understand why capital is essential for credit unions, from absorbing losses to maintaining public confidence.Net Worth Ratios and PCA: Dive into the history and significance of net worth ratios in ensuring credit union stability.New Complex Credit Union Leverage Ratio (CCULR): Learn about the simplified capital adequacy measure introduced in 2023 and its implications for credit unions.Risk-Based Capital: Explore how this tool provides credit unions with a tailored perspective on their capital adequacy.Capital Management Strategies: Discover best practices for developing a capital plan that aligns with your credit union’s unique risks and opportunities.Listener Questions:Have questions about credit union capital or topics from today’s episode? Send them to Mark via email at cu.exam.solutions@marktreichel.com or through his website at www.marktreichel.com. Your question might be featured in a future episode!Contact Information:For consulting inquiries or to learn more about how Mark and Steve can assist your credit union, reach out using the above contact details.Closing Thoughts:This episode highlights the importance of a strategic approach to capital management. Whether you’re grappling with regulatory requirements or looking to optimize your capital structure, this conversation offers valuable guidance for credit union leaders

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/## Episode Summary: NSF and Overdraft Fees - What You Need to KnowIn this episode, Mark Treichel interviews Joe Goldberg, former director of the NCUA's division of consumer compliance policy and outreach, about the December 2024 NCUA letter addressing consumer harm from certain overdraft and NSF fee practices.### Key Topics Covered:Joe Goldberg discusses NCUA's recent guidance on problematic overdraft fee practices, including:1. Authorized Positive Settled Negative (APSN) fees - When a debit transaction is approved with sufficient funds but settles negative due to intervening transactions2. Multiple re-presentment fees - When members are charged multiple NSF fees for the same check/ACH item being represented3. Return Deposited Item (RDI) fees - When members are charged for depositing third-party checks that are returnedThe episode also covers:- NCUA's historical approach to overdraft oversight since 2005- Risk management principles credit unions should consider- The agency's current supervisory approach and expectations- New research findings on overdraft/NSF fee revenue at credit unions### Key Takeaways:- Credit unions should review their overdraft programs for compliance with current guidance- Self-identification and correction of issues is viewed favorably by NCUA- Overdraft/NSF fees typically comprise 2-5% of credit union revenue- The agency will continue monitoring these fees through call report data- Credit unions should ensure fee practices are fair and clearly disclosed to members### Featured Guest:Joe Goldberg - Former Director, Division of Consumer Compliance Policy and Outreach at NCUA (2014-2021)### Host:Mark Treichel - With Flying Colors Podcast

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/ Episode Description:In this special archive episode of With Flying Colors, Mark shares valuable insights from his years of experience in credit union examination and consulting. Broadcasting straight from the beach, he breaks down the top 10 ways credit unions can avoid receiving a Document of Resolution (DOR) from the NCUA. Whether you're preparing for an exam or just looking to fine-tune your operations, these practical tips will help ensure compliance and maintain a smooth examination process.What You'll Learn in This Episode:Understanding Document Resolutions (DOR): What they are, why they occur, and how to avoid them.Key Triggers for DORs: Common issues such as violations of regulations, policies, or strategic plans.Proven Strategies: How to communicate, negotiate, and train effectively to avoid potential pitfalls.Best Practices: Mark’s insights on proactive planning, staying informed, and maintaining good examiner relationships.Top 10 Tips Highlighted in This Episode:Comply with the Federal Credit Union Act and NCUA regulations.Follow your organization's policies diligently.Stick to your approved strategic plan or adjust it responsibly.Communicate effectively with NCUA examiners.Negotiate issues identified during the examination process.Invest in training for staff, boards, and committees.Stay updated with regulatory changes by subscribing to NCUA Express.Listen to informative podcasts like With Flying Colors and Credit Union Regulatory Guidance.Avoid accounting problems by ensuring reconciliations and timely audits.Make senior leadership accessible to examiners during the examination process.Resources Mentioned:NCUA ExpressCredit Union Regulatory Guidance podcastMark’s consulting services for NCUA examination supportCall to Action:If you enjoyed this episode, don’t forget to subscribe to With Flying Colors for more actionable tips and insights into navigating NCUA exams and credit union compliance. Ratings and reviews on Apple Podcasts and Spotify are always appreciated! 

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Our most downloaded episode of the year:  Our Take on the NCUA Supervisory Priority Letter.

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/ The NCUA Appeal Process: A Complete Guide # NCUA Appeal Process with Mark Treichel## OverviewThis episode covers the formal appeal process at NCUA, detailing how credit unions can appeal examination findings and supervisory determinations.## Key Points About Initial Response to Examination Findings- Start with the examiner level - resolving issues at the lowest level is most time and cost-efficient- Common reasons for appeals include:  - Factual errors not corrected  - CAMEL code downgrades  - Requirements that could negatively impact member service  - Requirements affecting capital building or earnings  - Requirements impacting liquidity control## What Can Be AppealedMaterial supervisory determinations that may significantly affect:- Capital- Earnings - Operating flexibility- Nature/level of supervisory oversightSpecifically includes:- Composite examination ratings of 3, 4, or 5- Loan loss reserve adequacy determinations- Classification of significant loans/assets- Federal consumer financial law compliance determinations- Certain waiver requests/additional authority applications## Appeal Process Timeline1. Initial Appeal to Regional Director   - Must file within 30 days of examination   - Regional Director has 30 days to respond2. Secondary Appeal Options (if Regional Director denies)   - 30 days to appeal to either:     - Office of Examination & Insurance, OR     - Supervisory Review Committee (recommended path)   - These bodies have 60 days to respond   - Can request oral hearing with Supervisory Review Committee3. Final Appeal to NCUA Board   - 30 days to file after previous denial   - Board has 90 days to decide   - May request oral hearing (not guaranteed)Total timeline can extend 8-12 months, especially if oral hearings are involved.## Important Considerations- Must follow each step sequentially - cannot skip levels- Component CAMEL ratings cannot be directly appealed, but arguments about components support composite rating appeals- Document resolutions are negotiable- Appeals create an administrative record- Partial victories possible at each level- Success likelihood typically increases at higher levels- "Tie goes to the runner" - burden of proof is on the credit union## ResourcesRelated regulations:- Part 746, Subpart A of NCUA regulations- Preamble to final rule provides important context## Contact InformationFor more information or consultation about appeals:- Connect with Mark Treichel on LinkedIn- Contact Credit Union Exam Solutions*Note: This episode expands on an earlier podcast about the regional appeal process featuring Todd Miller.*

Todd Miller, a veteran with 34 years at the NCUA, shares valuable insights on building effective Asset and Liability Management Committees (ALCO) in credit unions. He discusses the importance of distinct committee charters, member selection, and how board involvement can enhance governance. The conversation also highlights the critical roles of the Chief Risk Officer and the necessity of robust documentation to align with strategic objectives. Miller emphasizes that a well-structured ALCO is key to managing risks and adapting to organizational needs.

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/

Set up a call:https://calendly.com/cuexamsolutions/talk-to-mark-about-any-exam-topic?month=2024-10Check out our website:https://calendly.com/cuexamsolutions/talk-to-mark-about-any-exam-topic?month=2024-10Are you worried about an NCUA exam in process or looming on the horizon? Don't face it alone!We're ex-NCUA insiders with decades of experience, ready to guide you to success. Our team understands the intricacies of NCUA examinations from the inside out.Hire us and gain:• Peace of mind during your exam process• Insider knowledge of NCUA procedures and expectations• Strategies to address potential issues before they become problems• Continuous access to our extensive subject matter expertiseWith our access retainer, you'll have on-demand support from former NCUA experts. We're here to ensure your credit union passers its exam with flying colors in its next examination.Contact Credit Union Exam Solutions today to learn more about our services and how we can help your credit union succeed.LUAs What You Need to KnowKey Points:- LUAs are formal agreements between NCUA and credit unions to address severe problems- Usually issued to troubled credit unions, though occasionally for compliance reasons- Formal LUAs are typically published by NCUA- LUAs describe major issues and required corrective actions with timelines- Language in published LUAs can be very strict and one-sided- Credit unions should seek outside advice when faced with a published LUA- All board members are bound by an LUA, even those who vote against it- LUAs should focus on root causes, not every minor issue- LUAs for established credit unions generally don't have termination dates- In the current economic climate, NCUA may be issuing more LUAsAdvice for Credit Unions:- Understand all requirements and timelines in an LUA before signing- Negotiate terms with NCUA if possible before finalizing- Request reasonable time to review draft LUA with board- Consider consulting attorneys or credit union advisors - Be aware of reputational risks from published LUAs- Recognize that all board members are bound by a signed LUAGuest Experts:- Steve Farrar: Former NCUA examiner and central office staff- Todd Miller: Former NCUA examiner and director of special actionsHost: Mark Treichel, Credit Union Exam SolutionsThis episode provides an in-depth look at Letters of Understanding and Agreement (LUAs) from former NCUA insiders, offering valuable insights for credit union leaders dealing with these formal actions.

In this discussion, veteran credit union consultant John McKechnie shares his expertise on crisis communication strategies. He emphasizes the need for quick and transparent messaging during crises, drawing lessons from the 2008 financial meltdown and the aftermath of 9-11. McKechnie underlines the importance of identifying stakeholders and engaging members proactively. He also introduces the NCUA's conservatorship checklist as a crucial tool for effective coordination. Prepare your credit union to handle crises with confidence and member trust!