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January 21, 2016
NAFCU renews call for 18-month exam cycle
NAFCU President and CEO Dan Berger renewed the association's call for 18-month examination cycles for well-run credit unions after the FDIC approved a similar interim rule for community banks.
"Given the recent FDIC and OCC actions to allow certain bankers an 18-month exam cycle, NAFCU again calls upon the NCUA to lengthen the exam cycle for healthy, well-run credit unions," Berger wrote in a letter to NCUA Board members. "Credit unions did not cause the financial crisis, are in extremely sound shape as an industry, and do not need the additional burden of more frequent exams."
Berger continued, "Lengthening the cycle will also save NCUA resources for credit unions that are facing challenges and need more oversight. We appreciate that the NCUA has indicated as recently as today that the agency is open to an 18-month exam cycle, but we urge the agency to approve this much-needed relief for credit unions as soon as possible."
The FDIC Board approved an interim final rule allowing an 18-month examination cycle for qualified community banks and thrifts with less than $1 billion in assets. Comptroller of the Currency Thomas Curry said an identical interim rule is in place for OCC-supervised banks.
This leaves credit unions as the only federally regulated depository institution subject to a strict, 12-month exam cycle at the federal level.
NAFCU has strongly advocated for the return to an 18-month exam cycle for low-risk credit unions. NCUA Board Member Mark McWatters spoke in favor of examining a return to the 18-month exam cycle during the November board meeting. NCUA Chairman Debbie Matz said it was a possibility for the future but gave no other time frame for action.
The OCC and FDIC have had an 18-month exam cycle in place for some time. Previously, the asset-size threshold for the 18-month exam cycle was $500 million, but that was raised under legislation passed in December as part of the 2016 highway funding bill. That bill also included NAFCU-sought privacy notice and some qualified-mortgage relief for credit unions.
Curry said the 18-month exam cycle eases the burden on well-managed institutions and allows regulators to focus their resources "on those institutions that need it most—those that present capital, managerial, or other issues of significant supervisory concern." He added, "We don't have unlimited supervisory resources, and it's important that we manage those resources wisely."
Curry is one of five members of the FDIC Board; CFPB Director Richard Cordray also sits on the board.
"Given the recent FDIC and OCC actions to allow certain bankers an 18-month exam cycle, NAFCU again calls upon the NCUA to lengthen the exam cycle for healthy, well-run credit unions," Berger wrote in a letter to NCUA Board members. "Credit unions did not cause the financial crisis, are in extremely sound shape as an industry, and do not need the additional burden of more frequent exams."
Berger continued, "Lengthening the cycle will also save NCUA resources for credit unions that are facing challenges and need more oversight. We appreciate that the NCUA has indicated as recently as today that the agency is open to an 18-month exam cycle, but we urge the agency to approve this much-needed relief for credit unions as soon as possible."
The FDIC Board approved an interim final rule allowing an 18-month examination cycle for qualified community banks and thrifts with less than $1 billion in assets. Comptroller of the Currency Thomas Curry said an identical interim rule is in place for OCC-supervised banks.
This leaves credit unions as the only federally regulated depository institution subject to a strict, 12-month exam cycle at the federal level.
NAFCU has strongly advocated for the return to an 18-month exam cycle for low-risk credit unions. NCUA Board Member Mark McWatters spoke in favor of examining a return to the 18-month exam cycle during the November board meeting. NCUA Chairman Debbie Matz said it was a possibility for the future but gave no other time frame for action.
The OCC and FDIC have had an 18-month exam cycle in place for some time. Previously, the asset-size threshold for the 18-month exam cycle was $500 million, but that was raised under legislation passed in December as part of the 2016 highway funding bill. That bill also included NAFCU-sought privacy notice and some qualified-mortgage relief for credit unions.
Curry said the 18-month exam cycle eases the burden on well-managed institutions and allows regulators to focus their resources "on those institutions that need it most—those that present capital, managerial, or other issues of significant supervisory concern." He added, "We don't have unlimited supervisory resources, and it's important that we manage those resources wisely."
Curry is one of five members of the FDIC Board; CFPB Director Richard Cordray also sits on the board.
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