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Federation urges NCUA Boost training for CDCULICU exams
NEW YORK (12/17/10)--The National Federation of Community Development Credit Unions has written a letter to the National Credit Union Administration (NCUA) Board urging the agency to increase its examiners' training related to examinations of community development credit union (CDCU) and low-income credit unions (LICUs). The letter is in response to NCUA's announcement that it plans to expand its examiner ranks so it could provide increased examination coverage for credit unions nationwide. Citing concerns from CDCUs and LICUs that examiners have been inconsistent in examining these credit unions, federation President/CEO Cliff Rosenthal submitted a letter to the NCUA Board requesting that new examiners hired have access to specialized training on CDCUs and LICUs. "In a number of meetings over the last 10 years, agency staff has confirmed that new or less experienced examiners are often assigned to small and low-income credit unions, presumably because these are less complex institutions that represent a smaller degree of material risk to the National Credit Union Share Insurance Fund (NCUSIF)," Rosenthal said in the letter. However, he added, "because LICUs and CDCUs often do not fit the mold or demonstrate the ratios and operating characteristics of other credit unions, the examination process has often been a rather rocky one… As some of our CDCUs have put it, they have needed to 'educate the examiners [themselves]." While credit unions have reported that implementation has not always been uniform, Rosenthal praised the agency for its efforts to date, referring to the agency's supervisory letter on examination of LICUs and CDCUs, and stressed the need for more consistent implementation. "Given the stress in the credit union industry, and especially in view of the vulnerability of many of our smallest institutions, it is especially important that new examiners are well-trained on this document," he said, adding that training "will be an integral and significant part of the orientation of new, as well as existing, NCUA examiners." Thursday NCUA also announced two rules related to the low-income definition and data determining whether membership fits the low-income definition. (See related story in News Now's Washington section on "NCUA addresses low-income members, CUs during meeting.") The federation and the Credit Union National Association (CUNA) have worked with NCUA for years to provide guidance to examiners working with LICUs and CDCUs. CUNA also has urged increased examiner training. CUNA's Small Credit Union Committee worked with the federation and NCUA to ensure examiners know the operational differences allowed LICUs and CDCUs prior to NCUA's January 2010 CDCU/LICU Examiner Guidance Letter (10-CU-01) (News Now Jan. 19).


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