Despite Threat Of High Fines, CUs Still Filing Late Call Reports

ALEXANDRIA, Va. — Even though NCUA warned credit unions they could face fines up to $1 million a day for filing late call reports, the agency said Wednesday that hundreds of CUs are still tardy.

Late filers of their fourth-quarter 2013 call reports, due in January, will receive a warning letter from the agency. Civil money penalties could begin after the April 25 filing date.

But the warning apparently has had some effect, with the number of CUs filing call reports late for the fourth quarter of 2013 dropping by more than two-thirds compared with 4Q 2012.

"A total of 561 federally insured credit unions filed their fourth-quarter call reports late or made corrections after the Jan. 24, 2014, deadline," NCUA Board Chairman Debbie Matz said. “This number is unnecessarily high and unacceptable."

For the last quarter of 2012, 1,744 credit unions failed to file on time. For the first three quarters of 2013, an average of 1,048 credit unions filed late each quarter.

Matz said earlier this year that late filings of quarterly call report and profile data have become "a serious problem."

Late filing impacts NCUA's ability to conduct effective off-site supervision and delays the release of quarterly industry data to the general public, according to Matz.

In a letter sent to CUs in January (Letter 14-CU-03) NCUA stated it will consider "mitigating factors" outlined in Section 206 of the Federal Credit Union Act, including:

• The size of financial resources and good faith of the credit union
• The gravity of the violation
• The history of previous violations
• Other matters as justice may require regarding the circumstances of late or false/misleading submissions, such as natural disasters, incapacitation of key employees, etc.

CUNA and NAFCU have stated they are concerned about the agency's filing penalty. CUNA said NCUA's letter is a clear case of "regulatory overreach" and NAFCU cited the fines as "extreme."

Many credit union CEOs have stated that NCUA is warranted in establishing some form of a penalty to end chronic late filing, reduce examiner costs and allow the agency to release data in a timely manner.

But a number of executives described the fines as excessive, constructed without credit union input, and threatening the profitability — if not the viability — of some small institutions.