Dear Editor,

Mr. Fryzel is just plain wrong in his assessment of moving to an 18-month exam cycle. This is not a case of monkey see, monkey do. It is very relevant that the NCUA follow the FDIC, as appropriate. To be clear, NAFCU and Congress are not asking the NCUA to blindly follow the FDIC. NAFCU has long asked the NCUA to change its exam cycle for well-run healthy credit unions, as appropriate. The fact that the FDIC is going to do the same for banks puts credit unions at a disadvantage. Exams cost time and money, both to the credit union and to the NCUA. Those resources should be put where they are really needed.   

I am not a regulator, but I have personally read every single material loss review that the NCUA has publicly available. Failure of an institution is usually due to a whole host of factors. That is what the CAMEL system is designed to measure. The exam looks at the credit union comprehensively. Unless there is massive fraud, a credit union cannot go from a 1 to a 5 overnight or even in 18 months. And if it did, the signs would show up on the quarterly financials and the NCUA could step in, as appropriate. 

The NCUA has an incredibly important role in ensuring that we have a safe and sound credit union system, but all signs point to allowing the vast majority of credit unions to focus on seeing their members' faces and not their examiners. Banks and credit unions operate in the same economy and the same communities. We are all on the same road. All NAFCU is doing is asking the NCUA to do is step on the gas and implement a change it has indicated it is willing to consider. We all should be able to take advantage of savings at the pump. 

Besides, the NCUA's return to an 18-month exam cycle is hardly the equivalent of jumping off a bridge. Not when we have the NCUA's risk-based capital rule to take care of us all now, right?

Carrie Hunt

Executive Vice President of Government Affairs and General Counsel

NAFCU

Arlington, Va.