Sept. 18, 2012 – NCUA’s Office of Inspector General has told Congress NCUA’s examination process has clear standards and policies but has recommended four changes intended to make practices more consistent and better define the agency’s ombudsman position.
The OIGs at all the federal financial institution regulatory agencies were asked by Senate Banking Chairman Tim Johnson, D-S.D., to look at their examination and complaint processes as they apply to small credit unions and banks and to report back findings.
NCUA’s OIG, in a report dated Aug. 31, said NCUA’s definition of “small” credit union is one with assets totaling $10 million or less, but its risk-focused examination process applies to all natural person credit unions with assets of less than $1 billion. The risk-focused exam process is used for exams at more than 97 percent of all federally insured credit unions.
The OIG noted that NCUA’s individual regional offices have, for more than a decade, used their own exam manual and that no two regional exam manuals, despite the fact they incorporated a national manual, were the same.
The OIG said the agency’s recent completion of a National Supervisory Process Manual addresses this concern adequately. Meanwhile, it provided four suggestions regarding processes for exams and appeals, to which the agency has agreed. These include:
- develop a management automated resources system report showing how long outstanding examinations and supervisory contacts have remained open, organized by supervisory examiner group;
- require each regional office to regularly provide the Office of Examination and Insurance specific details on disputed examination issues elevated to the Regional Director;
- develop an electronic system of records for all Supervisory Review Committee activities to document decisions and supporting information regarding appeals;
- review the NCUA ombudsman position description to better define the role and have the designee report directly to the NCUA chairman, not the Office of Consumer Protection.
On average, the OIG found that from 2007 through 2011, all regular federal credit union exams were completed within an average of 96 hours and regular joint federally insured, state-chartered credit union exams were completed within an average of 117 hours. The amount of time spent with each institution was based on its size, complexity and risk profile.