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Exam Flexibility Initiative Makes 10 Recommendations to Improve Exam Process

ALEXANDRIA, Va. (Oct. 6, 2016) – Well-managed, low-risk federal credit unions with assets of less than $1 billion could move to an extended examination cycle beginning next year, pending approval by the NCUA Board.

The extended exam cycle is one of 10 recommendations the agency’s Exam Flexibility Initiative working group included in a report now available online (opens new window). A comprehensive list of frequently asked questions and a summary of stakeholder comments are also available on the Exam Flexibility Initiative’s webpage.

“NCUA is committed to improving operations, responding to change, and finding ways to meet the needs of the credit unions we regulate while protecting the members whose money we insure,” NCUA Board Chairman Rick Metsger said. “We want to be more efficient and more effective while always putting safety and soundness first. We launched this initiative last May as part of the continual quality improvement program, and the working group has been diligent about gathering information and suggestions from credit union stakeholders throughout the process. I am looking forward to discussing the working group’s recommendations at our next Board meeting.”

NCUA Region IV Director C. Keith Morton, who led the internal working group, said stakeholder comments were important.

“We appreciate the credit union executives who participated in stakeholder conference calls discussing the challenges with NCUA’s current examination program.” Morton said. “We received thoughtful, constructive, and informative feedback and recommendations. This was very helpful to NCUA as we evaluated various actions appropriate to address concerns.”

The NCUA Board is scheduled to consider the working group’s recommendations as part of the agency’s 2017–2018 budget, scheduled to come before the Board at its Nov. 17 open meeting.

With Board approval, the following recommendations would become effective Jan. 1, 2017:

• An extended exam cycle for well-managed, lower risk federal credit unions;
• Enhanced examinations of small federal credit unions;
• Enhanced coordination of exams for federally insured, state-chartered credit unions; and
• Establishment of an NCUA and state supervisor working group.

NCUA could make other changes as of July 1, 2017, including improvements in examination planning and the issuance of a post-exam survey, if the Board approves those recommendations.