CHICAGO-For 2012, NCUA is exploring a realignment of how it deploys its examiners and the amount of time examiners spend at credit unions, according to Chairman Debbie Matz.
Matz noted that currently 46% of exam hours are spent with CUs that represent less than 10% of total assets. As a result, the agency is mulling a plan to redeploy examiners to credit unions with the most risk, which would mean spending less time at small credit unions.
She added that the agency is also reviewing the scope of exams and shortening the amount of time necessary to complete exams-chiefly by differentiating between technical assistance and supervision. NCUA's Office of Small Credit Unions will be available to provide further assistance to those CUs after exam times are realigned.
For larger CUs, Matz said that NCUA had formed a Systemic Risk Working Group, to be led by Larry Fazio, the administration's deputy executive director. The chairman said the agency is still determining which supervisory, examination and regulatory changes will need to be made as part of the working group.
"We are taking a broad look," she said, adding that the agency is investigating making it easier for CUs to gain low-income designation.
Overall, the industry is showing positives, Matz said, with net worth back at 10% and steady improvements in ROA. "You need a magnifying glass" to see the drop in delinquencies and chargeoffs, she said, "but it is there."
Among the other options on the table for 2012, said Matz, are a proposal to allow all credit unions to hold Treasury bills with a zero risk rate; authorizing certain derivations as an interest rate risk hedge in order to protect CU portfolios; and targeting regulations as a response to concerns that some regs are outdated or don't apply to all credit unions. This will "ensure that the rules are in sync with a modern market place and are easily understood and targeted to interest rate risk," she said.
A Push To Boost MBL Cap
The agency continues to push Congress to raise the MBL cap, said Matz, but she was doubtful that either bill would move forward anytime soon because of the current mood in Congress.
Matz also noted that NCUA is going green with its NCUA Express service, making all public information-such as its Letters to Credit Unions, press releases, regulatory alerts and more-available through e-mail, with the goal of eliminating paper mailings to CUs and staff. The service is free.
