Late Call Report Filers Could Face $1 Million-Per-Day Fine

ALEXANDRIA, Va. -- NCUA wants to make sure credit unions file their call reports on time, stating in a new letter that late filers could face a $1 million-per-day fine from the agency for each day the call report is late.

Fines would begin after the April 25, 2014, filing date. CUs that file late this month, after Jan. 24, will receive a warning letter. Chairman Debbie Matz explained in the letter, posted Thursday on the agency’s website, that $1 million daily is the maximum fine.

Matz said that late filings of quarterly call report and profile data have become “a serious problem.” For the third-quarter 2013 reporting cycle, more than 1,000 federally insured credit unions, ranging from large to small, filed their reports after the Oct. 22 deadline.

According to Matz, late filing impacts NCUA’s ability to conduct effective off-site supervision and delays the release of quarterly industry data to the general public. “It is also a drain on NCUA resources, as field examiners are required to follow-up with tardy FICUs.”

The letter (Letter 14-CU-03) outlined that Section 202 of the Federal Credit Union Act sets specific dollar ranges for civil money penalties:

1. Up to a maximum of $2,000 per day may be assessed for each day a required report is “minimally” late or contains uncorrected false/misleading information if the late or false/misleading filing is unintentional and the credit union has reasonable procedures in place to avoid such errors.
2. Up to a maximum of $20,000 per day may be assessed for each day a required report is late or contains false/misleading information if the late or false/misleading filing is not covered by the “unintentional” safe harbor outlined in number one above.
3. Up to a maximum of $1 million (or 1% of total assets, whichever is less) per day may be assessed if a FICU knowingly or with reckless disregard for accuracy submits a false or misleading report and fails to correct it.

When determining the exact amount to be assessed against a CU, NCUA in the letter 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.

NCUA noted it has adjusted call report and profile submission due dates to the fourth Friday of each month following the end of a quarter to give credit unions more time to file.