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NCUA Chairman Seeks to Eliminate Calendar Year Requirement, Forming Working Group

ALEXANDRIA, Va. (May 12, 2016) – National Credit Union Administration Board Chairman Rick Metsger is initiating a review of the agency’s examination process, including the frequency of examinations, and he will form a working group to bring all stakeholders into that effort.

Metsger outlined his plans in a speech today to the Idaho Credit Union League.

“We need to see how we meet our statutory responsibility to examine credit unions for safety and soundness with as small a footprint as possible,” Metsger said. “My number one priority this year is to focus on continual quality improvement. Part of that is looking at our examinations. I want a thoughtful, thorough review of how we might reduce the time we spend onsite and the frequency with which we conduct examinations where performance standards for safety and soundness justify an extended cycle.

“To begin this process,” Metsger said, “we must first remove the requirement that every federal credit union, and all federally insured, state-chartered credit unions with more than $250 million in assets, be examined each calendar year. This prescriptive requirement creates a logjam of exams at the end of each year, which is neither effective nor efficient.”

The goal, Metsger said, is to implement this change within the next two months. Removing the calendar year requirement will not alter the general objective of examining credit unions every 12 months, he said, but it is a necessary first step towards establishing an extended examination cycle for well-managed, financially sound credit unions.

Metsger also said he will form an internal working group, similar to the one that developed the agency’s proposed field-of-membership rule, so the agency can hear from stakeholders and make further changes to the examination process “sooner rather than later.”

Metsger said enhanced technology tools should enable NCUA’s examiners to collect more data without having to make onsite visits, benefitting both credit unions and NCUA’s workforce.