ALEXANDRIA, Va. — Despite the threat of civil money penalties for submitting late call reports, and NCUA issuing warning letters after the January deadline, more than 100 CUs still filed late as of the April 25 filing date.
NCUA announced Thursday that 104 federally insured CUs filed late this time, an 80% drop from the 561 FCUs that submitted their fourth-quarter call reports late or made corrections after the Jan. 24 deadline. Ninety-three of the late filers were credit unions with assets of less than $50 million.
As the agency has stated, tardy CUs could be fined up to $1 million a day.
Late filers with no legitimate reason to file late will receive a notification letter from the agency and will have 30 days to respond with any extenuating circumstances. After that period a fine could be levied.
NCUA's announcement of the fine last year has had an impact on the number of late filings. Late filers of their fourth-quarter 2013 call reports received a warning letter from the agency, letting them know civil money penalties could begin after the April 25 filing date.
Even with the big drop in Q1 2014 filings over year-end 2013, NCUA Board Chairman Debbie Matz said more than 100 is unacceptable.
"The goal is full compliance," Matz said in a statement. "More credit unions filed their call reports in a timely fashion, but 104 late filers is still far too many. It was particularly troubling that most of the credit unions that filed late for the first quarter had not done so the previous quarter, so they came in late even after NCUA brought this issue to their attention and announced plans for assessing penalties."
For the last quarter of 2012, 1,744 credit unions failed to file on time. For the first three quarters of 2013, an average of 1,048 credit unions filed late each quarter.
Late filing impacts NCUA's ability to conduct effective off-site supervision and delays the release of quarterly industry data to the general public, according to Matz.
In a letter sent to CUs in January (Letter 14-CU-03) NCUA 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.
CUNA and NAFCU have stated they are concerned about the agency's filing penalty. CUNA said NCUA's letter is a clear case of "regulatory overreach" and NAFCU cited the fines as "extreme."
Scott Wilson, CEO of $464 million SeaComm FCU in Massena, N.Y., reacted to more than 100 CUs still lagging with their report.
"I do believe there needs to be some sort of penalty to ensure regulatory filings are done on time," Wilson told Credit Union Journal. "Reasonableness must come into play. I am surprised by the number who, despite written warnings, are still not adhering to the requirement. I do not believe $1 million per day is reasonable in any way shape or form, as NCUA must recognize it is the members' money that is ultimately paying for the penalty, not the money of the officials of those credit unions."
Wilson added that he expects his staff to file the CU's call report on time.
"It is a requirement of NCUA and we believe it is our responsibility to do that."
. NCUA is reviewing each late filing to determine the assessments and whether any mitigating factors exist to warrant forbearance.
