WASHINGTON-NCUA will change its exam procedures in 2012 to focus examiners' time on credit unions that post the greatest risk.
"When we took a look at our assets and where we deploy our resources, we saw a mismatch," NCUA Chairman Debbie Matz told Credit Union Journal. "The majority of examiner hours are being spent in the very smallest units because we have so many small credit unions. That's not where the risk for the share insurance fund is. As a result, we thought we needed to reallocate" to send examiners to CUs that pose greater risk to the NCUSIF.
Part of those changes include narrowing the focus of exams at small credit unions and focusing on efficiency, thereby freeing up hours for examiners to spend at larger CUs, the agency said.
"There are things that the examiners do sometimes in small credit unions which are not really examination issues, such as helping the credit unions with their record keeping or helping them balance their books or file Call Report data, which they will start to cut back on," said Matz. Those duties will be turned over to NCUA's Office of Small Credit Union Initiatives.
Matz said the changes were "a work in progress-it's going to evolve" and added that nothing was going to happen in the next month. She was not able to provide specifics about when the new exam process would be rolled out, but said that it had already been piloted in NCUA's Region I, with an eye toward piloting the new process in the other four regions throughout 2012 to get further input.
"We want to deploy it as quickly as possible, but we want to get it right," said Matz. "We don't have a specific date."
Beyond realigning exams, the agency is also finalizing its National Supervisory Manual in order to bring more consistency across the regions as to how exams are conducted. Matz said that NCUA sometimes hears from credit unions that feel they are treated differently than CUs in other regions, "and the National Supervisory Manual is intended to eliminate those discrepancies."
Matz confessed that completion of those guidelines has not gone as quickly as NCUA had hoped, but the agency was working to give examiners and others ample time to comment. "I don't want to be overly optimistic, but we hope to get it out by summer," said Matz.
Matz added that credit unions' overall health continues to improve, with lower delinquencies and charge-offs and lending slowly on the rise. "They are turning the corner and they need to keep doing what they've been doing."
