"Stress tests are forward-looking measures. They're designed to determine whether an institution is holding an adequate capital cushion to survive adverse scenarios and to allow credit unions to make adjustments before a crisis hits," she said.

The Dodd-Frank Act requires certain financial firms with more than $10 billion in assets to conduct annual stress tests. Matz said stress testing is just as important for credit unions of comparable size.

"With more than $1 trillion in industry assets, deposits at federally insured credit unions are protected by a fund of just over $11 billion," Matz said. "However, four credit unions each have assets of $10 billion or more. So, each of those four has assets nearly the size of, or greater than, those of the Share Insurance Fund."

Those four credit unions are the $54.4 billion Navy FCU in Vienna, Va.; the $26.7 billion State Employees' CU in Raleigh, N.C.; the $15.8 billion Pentagon FCU in Alexandria, Va.; and the $11.5 billion Boeing Employees Credit Union in Tukwila, Wash.

Stress testing is a risk-management analysis that determines whether financial institutions have adequate capital to withstand economic shocks. Stress tests are meant to detect weak points in time for the institutions and regulators to take corrective action.

Matz said stress testing would be part of the NCUA's coordinated approach to supervision of a changing industry with asset growth concentrated in large credit unions. Stress testing of federally insured credit unions with state charters would be conducted in consultation with the state regulator.

The shocks used in the stress testing would be based on scenarios issued annually by the Federal Reserve, with adjustments for differences between banks and credit unions, Matz said.

"The results of NCUA's stress tests will help each credit union and NCUA identify future risks by quantifying the impact of potential financial and economic shocks on loan losses, net income and capital," Matz added. "The results will serve to alert credit unions to just how far their capital would fall under extreme stress scenarios, enabling them to make the necessary adjustments to protect against losses."

A credit union that fails a stress test would be required to revise its capital plan to demonstrate how it would meet minimum stress test capital ratios. A credit union that passes the test would benefit from the analysis by identifying potential improvements in its enterprise risk management system.

Matz said one issue still being reviewed is whether stress test results would be publicly available. She noted banks are required to disclose their results, but banks are publicly traded entities, unlike credit unions.

She said public disclosure would enhance transparency to members but results could also be misinterpreted and lead to inaccurate conclusions about a credit union's current stability.

The NCUA will seek comment on that issue, she said.