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NCUA Recognizes 1% ROA Harder to Achieve and Urges Examiners Not to Set it As 'Benchmark'

NCUA shared a Supervisory Letter distributed to all examiners with federal credit unions earlier this month to help ensure examiners and credit unions understand that a 1% return on assets is not required in order to achieve a CAMEL 1 rating.

By Sarah Snell Cooke | Updated on August 29, 2006

ALEXANDRIA, Va. — NCUA shared a Supervisory Letter distributed to all examiners with federal credit unions earlier this month to help ensure examiners and credit unions understand that a 1% return on assets is not required in order to achieve a CAMEL 1 rating.

“NCUA appreciates the delicate balance credit unions must strive to achieve between the short-term and long-term needs of the credit union. In this regard, I encourage credit union officials to be committed to a sincere, conscientious, and well-planned strategy to safely balance the net worth and earnings needs of the credit union with strategies to achieve longer-term objectives,” NCUA Chairman JoAnn Johnson wrote in Letter to Federal Credit Unions 06-FCU-04. “I am confident that with an open dialogue examiners will be supportive of such endeavors.”

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