The NCUA board on Thursday approved a plan to give regional directors more discretion in scheduling exams for federal credit unions and federally insured, state chartered institutions.
Under the plan, exams for federal credit unions do not have to be conducted every calendar year. However, the time between exams may not exceed 23 months.
Likewise, for federally insured, state chartered credit unions with assets exceeding $250 million, exams will not need to be conducted each calendar year. Instead, regional directors may choose which of those institutions to examine based on several factors, including the risk profile of the institution, emerging trends, the time that has lapsed since the last exam and coordination with state regulatory agencies.
The changes are effective immediately, but they may be amended based on the results of the Exam Flexibility Initiative, which Chairman Rick Metsger announced earlier this year.
The agency is also examining the call report process.
Metsger said the new exam plan eliminates the rigidity of the previous process as well as the need for examiners to cram exams into the end of the calendar year.
He said some exams scheduled for the end of 2016 could be rescheduled for the beginning of 2017.
The board approved the changes as part of its 2017-2020 Strategic Plan. The exam process changes were the only major alterations made to a draft plan that was released by NCUA earlier this year.
Credit union officials said they are pleased with the changes.
“NAFCU and our members appreciate that [the] NCUA board heeded our concerns regarding the exam cycle and voted to eliminate a strict annual exam cycle for federal credit unions and eligible federally insured, state chartered credit unions as part of its 2017-2021 strategic plan,” NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt said.
At the meeting, the board also received an update on its 2016 budget. NCUA CFO Rendell Jones said the agency's operating budget is expected to be about $2.7 million less than the agency originally estimated. However, Jones said since the agency's Operating Fund is partially based on the cash needs of the agency; he recommended no changes be made.
The board also received a report on the agency's Share Insurance Fund and was told that no new assessments will be needed this year.
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