NCUA Director of Examination and Insurance Larry Fazio joined the ongoing examination dialogue on Thursday, providing Credit Union Times with an exclusive preview of his article in the agency's April newsletter.

Fazio acknowledged that the exam process has been a hot topic lately, and although credit unions and examiners have “a good working relationship” in the majority of cases, there have been breakdowns in the process in other instances.

“There will always be tension inherent in this type of relationship, but the overall mood seems worse than usual,” Fazio said in his “Director's Report” column, which will be published in the NCUA's monthly newsletter Friday or Monday.

The chief examiner blamed both sides working “under a lot of pressure for a long time” due to the financial crisis, and said “disagreements, even fervent ones, on the condition of a credit union and any necessary remedial actions are to be expected … the exam process at its core involves the interaction of human beings. So, this is where we all need to start listening more.”

The NCUA's Listening Sessions will provide an opportunity to share ideas on how credit unions and examiners can better understand their corresponding roles, he said, and will reveal best practices on how examiners can achieve a results-oriented exam conducted with professionalism and empathy.

“When done right, you might not like the message, but you respect the means by which the examiner delivered it,” Fazio said.

NCUA officials will also share with Listening Session attendees how they can utilize the regulator's existing appeals process.

“We should discuss what might help credit unions feel more comfortable using this process when necessary,” he said.

On the other side of the coin, Fazio also wants to discuss how credit unions should treat examiners, noting “they are people, too.” He called examiners' jobs tough and often thankless, with long hours and frequent travel during the crisis.

“Examiners must make difficult judgments about the risk a credit union represents to the Share Insurance Fund,” Fazio said. “We hold examiners accountable for achieving resolution when risk is excessive or when regulatory violations are noted.”

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