Newsroom

January 18, 2017

NAFCU Compliance Blog eyes NCUA priorities, exams

The NCUA's 2017 supervisory priorities and its plans for extended exam cycles for certain well-run credit unions were detailed in a Compliance Blog post Tuesday by NAFCU Director of Regulatory Compliance Brandy Bruyere.

"The 2017 Supervisory Priorities are not surprising, our old friends cybersecurity and Bank Secrecy Act compliance remain high on the list," Bruyere wrote. She noted the NCUA's emphasis on the Federal Financial Institutions Examination Council's Cybersecurity Assessment Tool (CAT), for which NAFCU has created a user-friendly workbook.

Regarding extended exam cycles, Bruyere highlighted differences in the criteria for credit unions based on whether they are federally or state-chartered. Federal credit unions will qualify for an extended exam cycle of 14 to 20 months if they meet certain criteria, including:

• having assets of less than $1 billion;
• having a CAMEL code of 1 or 2;
• being "well-capitalized" under prompt corrective action (PCA) regulations; and
• having no outstanding documents of resolution relating to recordkeeping and not operating under formal or informal enforcement or administrative orders.

Small credit unions with "limited segregation of duties" that are otherwise eligible for an extended exam cycle may receive more frequent exams on a random basis, she noted.

For federally-insured, state-chartered credit unions, exam cycles can run from eight to 12 months if they meet any one of the following criteria:

• having assets of greater than $1 billion;
• having a CAMEL code of 4 or 5 will assets of more than $50 million;
• having a CAMEL code of 3 with assets of more than $250 million.

All other federally-insured, state-chartered credit unions will be examined "based on risk" at least once every five years, according to the NCUA letter.

NAFCU continues to call for an extended exam cycle for all well-run, healthy credit unions regardless of asset size.