Credit unions will receive new guidance in the near future on what the National Credit Union Administration considers appropriate levels of return on assets.
During a Web seminar hosted by Credit Union National Association last week, Dave Marquis, director of the NCUA's Office of Examination and Insurance, said additional guidance on ROA is being prepared, at a time when many credit unions are showing lackluster ROA numbers.
During the seminar, Mr. Marquis said the NCUA recognizes that credit unions need ROA relief, but he also emphasized that credit unions must demonstrate they are practicing responsible management of their balance sheets and careful strategic planning.
Credit Union Journal reported in 2006 that the NCUA had published a letter clarifying that the agency would not be holding credit unions to the long-established, minimum ROA target of 1%.
Instead, the NCUA said it was directing its field examiners to take into account an individual credit unions' earnings relative to net-worth needs.
In subsequent interviews, agency officials have reiterated their position on the 1% ROA target not being fixed.
In his most recent comments, Mr. Marquis said that if the agency were to update the letter today it might even set lower levels of ROA expectations than it did in 2006.
The NCUA declined further comment as to when it would take any action or what that action could entail.
