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NCUA should focus on exam improvements reg relief CUNA
WASHINGTON (4/2/12)--Examination improvements and a continued focus on regulatory relief are two areas that the Credit Union National Association urged the National Credit Union Administration (NCUA) to focus on in the coming months, with particular emphasis on implementing exam improvement procedures now, rather than waiting for legislation to be enacted.

In a Friday letter to the agency, CUNA President/CEO Bill Cheney urged the NCUA to consider how certain provisions of the Financial Institutions Examination Fairness and Reform Act (H.R. 3461) could be implemented outside of the legislative process.

The bill, which is co-sponsored by House Financial Services subcommittee on financial institutions chair Rep. Shelly Moore Capito (R-W.Va.) and ranking member Rep. Carolyn Maloney (D-N.Y.), would allow credit unions and other institutions to discuss examination concerns with a newly created Federal Financial Institution Examination Council (FFIEC) ombudsman, and to appeal regulator decisions before an independent administrative law judge.

The bill would also give credit unions and other financial institutions access to decision-making information gathered in their exams and codify exam policy guidance for financial regulators.

Cheney noted that CUNA had recommended that financial regulatory examiners provide credit unions with background information that supports their regulatory directives. "This recommendation is consistent with NCUA's Examiners' Guide and good public policy," Cheney said. CUNA also suggested that NCUA Chairman Debbie Matz, who is the current leader of the FFIEC, work with that group to establish the FFIEC ombudsman position, and urged the NCUA to provide additional and ongoing information and clarifications to the credit union system on how credit unions can appeal examiner findings, directives and other examination concerns.

Turning to the NCUA's own regulatory agenda, the CUNA CEO said the agency should seriously consider whether any new rules are actually necessary, including ones that are in the pipeline. "Healthy credit unions deserve to be encouraged; they deserve to have support from policymakers and they deserve a break from the constant regulatory pounding they have experienced virtually since the beginning of the economic downturn," Cheney said.

He noted that that CUNA is now conducting a line-by-line review of NCUA's rules to provide additional recommendations on how the rules could be minimized and streamlined. CUNA would also like to explore field of membership issues with the agency, including recommendations to facilitate greater service to rural districts and other communities, in the near future. CUNA has recently discussed these and other issues with NCUA staff.

Cheney also said that the agency's efforts, directed by Matz, to begin a review of the examination process and exam concerns as well as to limit regulations, were important steps in the right direction. CUNA discussed these endeavors with the agency at last month's CUNA 2012 Governmental Affairs Conference, and Cheney in last week's letter said CUNA wants to work with the NCUA on these important matters, including the examination review, which could be one of the agency's most important projects.

CUNA's Examination and Supervision Subcommittee has already met with NCUA Director of Examinations and Insurance Larry Fazio and hopes to follow up with him again in the coming weeks. The Subcommittee is also working on best practices for credit unions in the examination process.  

For the full CUNA letter to the NCUA, use the resource link.


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