Credit Unions Pleased with Risk-Based Exam, NCUA Says

ALEXANDRIA, Va.-In NCUA’s first survey of its risk-focused examination program implemented last fall, 397 credit unions rated the new process a 4.63 out of a possible 5.00. “I am pleased with the early results of the risk-focused examination program and the communication process between examiners and credit union officials over significant risk management and controls,” NCUA Director of Examination and Insurance Dave Marquis commented. “Our review indicates that exam reports are focused on significant risk areas rather than cluttering the correspondence with documentation of minor infractions. As we continue this process and make enhancements, we encourage and welcome feedback.” Remarks from the anonymous survey on the most useful aspects of the examination/examiner included: * Examiner helped credit union with the Allowance for Loan and Lease Losses Account including policy, requirements and spreadsheet for calculations (36 comments) * Examiner aided with the risk management process (9 comments) * Examiner helped address information technology and e-commerce concerns (5 comments) * Credit unions liked the risk-based examination because it promotes efficient use of examiner’s and staff’s time; focuses on areas needing attention; and deals only with risk areas (7 comments) Credit unions shared some not so positive comments on some aspects of the examination, including timing and the complexity and time-consumption for ALLL for a small credit union with low delinquencies. “This is an excellent early report card on the risk-focused examination program,” NCUA Chairman Dennis Dollar said. “As an agency, NCUA remains committed to basing our examination and supervision program more on the individual risk factors in each credit union, rather than taking a `one size fits all’ approach.” NCUA developed the risk-focused examination to focus resources on current and potential risks to credit unions for greater efficiency and effectiveness. Examiners also evaluate the credit unions’ performance and ability to identify, measure, monitor and control risk. -