NCUA's civil money penalties are having the agency's desired effect on late call report filers, according to two credit unions that filed late in April and have paid their fines.
CUs that missed the April 25 first quarter filing deadline say the lapse won't happen again and that the penalties are an expensive lesson.
Our Family Social CU in Omaha, Neb., sees it that way. The credit union was 18 minutes late filing its first quarter report because it overlooked the one-hour difference between eastern and central time zones.
"We filed on April 25 at 11:18 p.m. central time and now we know the filing deadline is based on eastern time," said Larry Cain, a member of the $547,000 CU's board. "This time we filed 10 days in advance of the (July 25) deadline for our second quarter call report."
Cain said FSCU paid the fine and did not appeal.
That is also the case with the $65,098-asset Greater Institutional A.M.E. Church CU in Chicago.
"We were one day late filing, but we just paid the fine," said CEO Lucille Latko, who emphasized the credit union filed its next call report on time.
Both CUs did not disclose their fine amounts.
According to CUs that spoke with Credit Union Journal, NCUA sent letters to late filers describing the penalties the agency planned to assess and gave credit unions until close of business July 16 to submit an agreement of consent with the regulator or appeal the fine.
CUs stated that the agency generally cut the fine in half if they settled. According to the July issue of The NCUA Report, the agency also provided contact information for an NCUA program officer to listen to appeals from institutions that believe they have valid reasons for missing a deadline.
A penalty is not final until a credit union has signed a consent order agreeing to pay a reduced penalty or an administrative judge has ruled in the NCUA's favor, NCUA's newsletter stated. All civil money penalties go to the U.S. Treasury.
Overall, CUs are quiet about the penalties. Credit Union Journal recently reached out to nearly one-fourth of the
Of the 104 federally insured credit unions that missed the April 25 call report filing deadline, 84 were notified by NCUA in June that they faced fines, according to a report from Northwest Credit Union Association's website. The steepest fine is reported to be above $10,000. NCUA has not yet released an official list of the institutions that have been fined, or the amounts, but stated that is coming soon.
Of the 104 that filed late, 85 had been on time the previous quarter. The 104 late filers represent an 80% drop from the 561 FCUs that submitted their fourth-quarter call reports late or made corrections after the Jan. 24 deadline.
Even with the big drop in late first-quarter filings this year, NCUA Board Chairman Debbie Matz has said more than 100 is unacceptable.
"The goal is full compliance," Matz said in an earlier statement.
Tardy CUs could be fined up to $1 million a day, NCUA has stated. FSCU's Cain sees the need for NCUA to put its foot down.
"I read about NCUA's problems with chronic late filers," said Cain. "My opinion is that NCUA should deal directly with [the chronic late filers]. I know the agency can't let this problem continue, but to start clamping down with someone who filed 18 minutes late is a little excessive. I understand where NCUA is coming from, and unfortunately in their efforts to deal with chronic late filers we got caught up in the middle of this."
