Newsroom

The NCUA is launching an alternating examination pilot program with six state credit union regulators Jan. 1. The pilot, which stems from the NCUA's exam reform initiative, will be tested on a select group of federally insured, state-chartered credit unions; federally-chartered credit unions were not eligible.

NAFCU has urged the agency to increase flexibility in examinations in order to reduce burdens and realize cost-savings. During the NCUA Board's budget briefing in October, NAFCU Board Chair Jeanne Kucey encouraged the agency to better coordinate resources and expertise with other regulators, including state supervisory authorities, and also recommended leveraging technological resources.

The six participating state regulators are: California Department of Business Oversight, Florida Division of Financial Institutions, New Hampshire Banking Department, Oklahoma State Banking Department, South Carolina Office of the Commissioner of Banking and Texas Credit Union Department.

According to the NCUA's release, the pilot will evaluate three alternating exam approaches:

• Alternating lead, where the NCUA and state regulators conduct joint examinations of federally insured, state-chartered credit unions, alternating which agency serves as lead each cycle.

• Alternating with limited participation, where the NCUA and state regulators alternate conducting examinations with some involvement from the other agency.

• Alternating, where the NCUA and state regulators alternate conducting examinations independently.

Participating credit unions were chosen by eligibility criteria, which considered CAMEL ratings, asset size, workload and timing of examination cycles, among other factors.

Additional FAQs can be found on the NCUA's website.