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Small CU issues are NCUA listening session focus
SAINT LOUIS, Mo. (6/6/12)--The many challenges faced by smaller credit unions took center stage at the National Credit Union Administration's (NCUA) Tuesday listening session.

Regulatory burden is an issue for credit unions of all sizes, and NCUA Director of Examinations and Insurance Larry Fazio noted that regulatory burdens can be exponentially more difficult for small credit unions to deal with, since they must comply with essentially all the same regulations as larger credit unions.

Local credit union attendees at the St. Louis session aired their concerns over the increasing trend of small credit union mergers. Bill Myers, director of the NCUA's Office of Small Credit Union Initiatives, said there are three reasons that small credit unions fail: fraud; lack of succession planning; and shrinkage.

NCUA staff said that eligible credit unions across the country will soon be notified of their Low Income Credit Union (LICU) designation status, and those credit unions, once they are contacted through an NCUA letter, will need only to accept or decline that LICU status. Credit unions were previously required to file applications and other relevant information with the NCUA before their LICU status could be denied or granted.

Overdraft fees, interchange, member business lending and related waivers, the NCUA's pending loan participation proposal, and the agency's recent decision to eliminate its regulatory flexibility rule and extend similar management and investment rights to all credit unions were also discussed during the meeting.

Credit union examination issues were also discussed during the session, and exam issues have been a consistent theme throughout the listening sessions.

The agency's work with other federal regulators, risk management, and National Credit Union Share Insurance Fund premium assessments were among the topics addressed at earlier listening sessions.

Additional sessions are planned for:

  • June 13 in Orlando, Fla.;
  • July 10 in San Diego, Calif.; and
  • July 31 in Denver, Colo.
The sessions are scheduled to be held between 1 p.m. and 4 p.m. Registration is limited to the first 150 reservations, but the agency is still accepting registrants for all three of the remaining meetings.

The Credit Union National Association and league officials are planning to attend all sessions to hear what credit unions raise as well as the NCUA's responses, and will follow up with its Examination and Supervision Subcommittee and the NCUA on key issues brought up during the sessions.

For more on the sessions, use the resource link.
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