TALLAHASSEE, Fla. (10/13/11)--The League of Southwest Credit Unions held four meetings with representatives from Alabama, Florida and federal regulatory agencies to discuss issues and look ahead to potential issues in late September.
The League of Southeast Credit Unions (LSCU) recently held four meetings with regional regulatory agencies. From left, NCUA Supervisory Examiners Ricky Crews and Sharon Daigle; Bill Berg, LSCU vice president, regulatory affairs; Laura Vann, LSCU vice president, cooperative initiatives; and Rosanna Jacobsen, LSCU director, compliance solutions. (Photo provided by League of Southeast Credit Unions)
The League’s meetings with the Florida Office of Financial Regulation’s Division Director Linda Charity and Bureau Chief Bruce Ricca centered on upcoming issues and ways the league and its service corporation, LEVERAGE, can help credit unions with products and services. Charity and Ricca talked about four areas of concern:
* Increased scrutiny of the Bank Secrecy Act (BSA); * Interest-rate risk; * New regulations from the Consumer Financial Protection Bureau; and * Enterprise risk management.
In meetings with Alabama Credit Union Administration (ACUA) Administrator Larry Morgan and Credit Union Assistant Administrator Lloyd Moore, the league once again emphasized the services it provides. The ACUA talked about the issues that concern its staff:
* Flat-loan demand/commercial lending; * Troubled debt restructuring (TDR); * Earnings; and * Yield on assets.
LSCU’s meetings with National Credit Union Administration (NCUA) supervisory examiners addressed many of the same issues. NCUA Supervisory Examiners Dave Freeman, Sharon Daigle and Ricky Crews said credit unions can expect increased examiner attention to:
* Asset-liability management program and interest-rate risk; * Enterprise-wide shocks on credit risk; * BSA annual training for staff and volunteers and independent testing; * TDRs on loan modifications; * Operating expenses for small and mid-size credit unions; * Elevation of documents of resolution (DORs) and repeat DORs to letter of understanding and agreements; * Financial literacy training for board members; and * Full disclosure of allowance for loan and lease loss.
The NCUA Supervisory Examiner in Alabama, Robert Parrish, told the league his office is looking at a number of issues, including:
* Member business lending--NCUA is looking for a proven track record of ability to underwrite and manage these types of loans. * Loan participations--Participating credit unions should do the same underwriting as the originating credit union. * BSA--NCUA expects documentation of training and may require independent testing. Robust documentation when not filing a SAR helps build confidence in a BSA Program. * TDRs--Credit unions should follow accounting guidance. TDRs are a concern if credit unions made accommodations because members were experiencing financial difficulty.