Feb. 1, 2013 – NAFCU welcomed NCUA Letter 13-CU-01, issued Thursday, on the agency’s 2013 examination focus and offered two ideas to help make the process even better for credit unions and their examiners: more preparation time and more guidance in the pre-exam checklist.
“We appreciate [NCUA’s] efforts on several fronts to improve transparency and clarity for examiners and credit unions,” NAFCU President and CEO Fred Becker wrote in a letter last evening to NCUA Chairman Debbie Matz and Board Member Michael Fryzel. He also applauded the agency for its commitment to make the exam process more clear.
In that spirit, the NAFCU president offered additional improvements:
- More exam prep time: A minimum of five working days’ notice before the examination or supervision contact, as is called for now in the supervision manual, is not enough time for credit unions to prepare. The FDIC contacts institutions about two months before the date of a routine on-site exam. NCUA could do the same through the pre-examination letter examiners send through AIRES.
- More clarity: NCUA could make the examination checklist – items examiners will be looking for – more specific, a move that should promote efficiency before and throughout the exam process.
NCUA Letter 13-CU-01 follows an overview of this year's exam focus that was provided in the agency's January newsletter. In the Letter to CUs, Matz outlines and explains key areas to be scrutinized in this year's exams, including:
- credit unions’ ability to manage interest rate risk and liquidity risk;
- how credit unions model their earnings, capital, and liquidity performance under stressed scenarios;
- contingency funding plans;
- concentration risk;
- less-established products;
- technology (including remote deposit capture, online banking, mobile banking, social media);
- internal controls.
More guidance to come
Matz also wrote that NCUA plans to release supervisory guidance this year on the member business lending rule waiver request process, the agency’s rule regarding credit ratings and its final rule on troubled debt restructurings.