ALEXANDRIA, Va. -- The National Credit Union Administration will form an internal working group in an effort to remove the calendar-year requirement.
The agency will initiate a review of its examination process, including the frequency of examinations, and will form a working group to bring all stakeholders into that effort, NCUA Chairman Rick Metsger said in a speech Thursday to the Idaho Credit Union League.
"We need to see how we meet our statutory responsibility to examine credit unions for safety and soundness with as small a footprint as possible," Metsger said. "My number one priority this year is to focus on continual quality improvement. Part of that is looking at our examinations. I want a thoughtful, thorough review of how we might reduce the time we spend onsite and the frequency with which we conduct examinations where performance standards for safety and soundness justify an extended cycle."
The first step in the process is to eliminate the requirement to examine all federal credit unions and all federally insured, state-chartered credit unions with more than $250 million in assets each calendar year, according to Metsger.
"This prescriptive requirement creates a logjam of exams at the end of each year, which is neither effective nor efficient," he said.
Eliminating the calendar year requirement will not alter the general objective to examine credit unions, but is a necessary first step toward establishing an extended credit examination cycle for well-managed, financially sound credit unions, he added.
Metsger said enhanced technology tools should enable NCUA's examiners to collect more data without having to make onsite visits, benefitting both credit unions and NCUA's workforce.
Metsger set the goal to implement the changes within the next two months. Toward this end, he will form an internal working group, similar to one that developed the NCUA's proposed field-of-membership rule, in order that the agency can hear from stakeholders and make further changes to the examination process as soon as possible.
