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Civil money penalties targeted to 84 late filers
WASHINGTON (7/1/14)--The National Credit Union Administration reports that it has identified possible financial penalties against 84 credit unions under its "zero tolerance" policy for credit unions that filed late first-quarter call reports.

The NCUA has only notified late filers of the penalty that may be assessed, but since the process is not complete, no credit union has been 'fined' at this point, the agency emphacizes. 

The Northwest Credit Union Association noted in its June 24 Anthem newsletter that one of the credit unions being notified is in Oregon and four are in Washington. If the five Northwest credit unions sign consent orders, their penalties will range from $243 to $1,900. The league also notes that the steepest penalty of the possible 84 could exceed $10,000 according to the NCUA, should the credit union choose not sign the consent order.

The NCUA told News Now that it soon will be releasing national data related to the civil money penalties.

In May, the NCUA anticipated it would begin the process of assessing civil money penalties from 104 credit unions that filed 2014 first-quarter call reports late (News Now May 23).

The regulator makes exceptions to its "zero tolerance" policy for credit unions able to document certain filing hardships, including a breakdown in the credit union's core operating system, a natural disaster taking place in the credit union's community, or the incapacitation of a key employee who would be responsible for filing the report.

If a credit union encountered a problem and contacted the agency help desk to report an issue with filing the report, the NCUA generally took this into account and waived the penalties, an agency spokesman told the NWCUA.

Any fines collected by the NCUA will be remitted to the U.S. Treasury Department and do not supplement the agency budget.

The NWCUA says it is asking the NCUA to better to address issues with online filing.

"We're asking the NCUA to remind credit unions a couple of days before the reports are due that the filing deadline is approaching," said John Trull, director of the regulatory advocacy. "Furthermore, we are advocating for technical improvements to the system that would notify credit unions immediately upon hitting the submit button if there is an issue, or to confirm the report was received."

If credit unions provide evidence of previous on-time filing, Trull noted, they may be able to appeal the fine with the NCUA's Office of Examination and Insurance. If the cost of the fine would materially harm the financial health of the credit union, Trull said, that would be another circumstance for the regulator to consider.

Since January, an NCUA spokesman noted, credit unions were notified many times of the policy, and warning letters were sent to credit unions that filed their December 2013 reports late. The regulator also posted articles in the NCUA Report.

Overall, the zero tolerance policy is close to having its intended effect, with 98.4% of credit unions filing on time--the highest percentage since online filing began, according to the NCUA.


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