Markets Wired

Board Action Bulletin

Enterprise Solution Modernization Program Points to Greater Agency Efficiencies

ALEXANDRIA, Va. (June 23, 2017) – The National Credit Union Administration Board held its fifth open meeting of 2017 at the agency’s headquarters here today and unanimously approved five items:

• Publishing a request for comment in the Federal Register on proposed changes in the methodology determining the overhead transfer rate.
• A notice of proposed rulemaking proposing amendments to agency regulations to create more transparency and simplicity in agency regulations governing corporate credit unions.
• A final rule updating agency regulations regarding treatment by the NCUA Board, as liquidating agent or conservator of a federally insured credit union, of financial assets transferred by a credit union in connection with a securitization or loan participation.
• A final rule revising agency procedures for disclosing records under the Freedom of Information Act.
• A final rule adjusting civil monetary penalties for inflation, as required by Congress.

The Board also received a briefing from the Office of the Executive Director and the Office of the Chief Information Officer on the Enterprise Solution Modernization program.

New Overhead Transfer Rate Methodology Out for Comment

Credit union system stakeholders will have an opportunity to comment on NCUA’s proposed changes to the way it calculates the overhead transfer rate.

NCUA in January 2016 published its original request for comments on the existing methodology for calculating the rate. Based on 40 comment letters received in response to that request and a subsequent internal assessment, the agency is proposing changes to the methodology to reduce both the complexity of the methodology and the resources necessary to administer the overhead transfer rate.

The Overhead Transfer Rate represents insurance-related costs in the agency’s operating budget to be funded by the National Credit Union Share Insurance Fund.

The staff presentation on the proposed changes to the overhead transfer rate methodology is available online here (opens new window).

Comments in response to this request, which is available online here (opens new window), must be submitted within 60 days of publication in the Federal Register.

Enterprise Solution Modernization Promises Reduced Burdens on Credit Unions

NCUA’s planned information technology modernization should improve the examination process and ease burdens on credit unions and on agency staff by reducing the amount of examination and supervision time spent in credit unions.

Launched in 2016, the Enterprise Solution Modernization program, the most complex program NCUA has undertaken, has three key parts:

• The Examination and Supervision Solution will replace the examination system and related supporting applications, including time and workload management tools.
• The Data Collection and Sharing Solution will define the necessary capabilities for a common platform to serve as a single point-of-entry for all data collection.
• The Enterprise Data Reporting Solution will lead to better analytics and data reporting.

The program will leverage commercially available tools rather than building and hosting customized systems. NCUA expects increased efficiencies and an improved user experience when the new system is in place.

A summary of the Enterprise Solution Modernization program provided by staff to the Board is available online here (opens new window).

Agency Seeking Comments on Corporate Credit Union Regulation Changes

NCUA is seeking comments on two proposed changes to its regulations covering corporate credit unions (Part 704) with respect to capital calculations.

The first change would better align capital components with a corporate credit union’s financial statements. The second would clarify the minimum retained earnings requirement for corporate credit unions.

The proposed changes would not alter existing standards for prompt corrective action, and the agency does not propose to change regulations on authorized investments, concentration risk limits, maturity limits or other limitations on corporate investment activities.

Comments on the proposed rule, available online here (opens new window), must be received within 60 days after publication in the Federal Register.

Safe Harbor Rule Updates to Respond to Industry Practices and GAAP

A final rule (Part 709) approved by the Board amends NCUA regulations on how the Board, as liquidating agent or conservator, treats a credit union’s financial assets transferred in connection with a securitization or participation.

The final rule responds to evolving industry practices, clarifies provisions in Part 709 that were affected by changes in Generally Accepted Accounting Principles, and parallels changes made to the Federal Deposit Insurance Act.

The final rule, available online here (opens new window), will become effective 30 days after publication in the Federal Register.

NCUA has issued a legal opinion letter on federal credit unions’ authority to issue and sell securities (opens new window).

Board Approves Revised Agency FOIA Procedures

The Board approved a final rule (Part 792) that makes changes in the agency’s procedures for responding to public records requests under the Freedom of Information Act.

The rule revises NCUA’s procedures for disclosing records, resolving disputes through the FOIA public liaison and the Office of Government Information Services.

The interim final rule approved by the Board became effective Dec. 22, 2016. NCUA accepted public comments through Jan. 23, 2017, and the final rule, available online here (opens new window), makes minor changes for consistency and clarification.

Final Rule Confirms Required Inflation Adjustments to Civil Monetary Penalties

The Board approved a final rule (Part 747) to amend its regulations and adjust for inflation the maximum amount for civil monetary penalties under its jurisdiction.

The Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015 requires agencies to adjust the maximum amounts of civil monetary penalties to account for inflation. The law does not require NCUA to assess the maximum penalty level, and the agency retains discretion to assess at lower levels, as it has done historically.

An interim final rule approved by the Board became effective Jan. 23, 2017. The final rule approved today, available online here (opens new window), confirms the adjustments made in that interim rule.

NCUA tweets all open Board meetings live. Follow

@TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at

www.ncua.gov. NCUA also live streams, archives and posts

videos of open Board meetings online.

Member Deposits Remain Protected to $250,000; Member Services Uninterrupted

ALEXANDRIA, Va. (June 23, 2017) – The National Credit Union Administration today placed Citizens Community Credit Union, located in Devils Lake, North Dakota, into conservatorship.

Member deposits at Citizens Community Credit Union remain protected by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts at Citizens Community Credit Union up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund also separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

Member services will continue uninterrupted at the credit union’s office located at 1117 Highway 2 E, Devils Lake, and at all branches. Members can continue to conduct normal financial transactions, deposit and access funds, make loan payments, and use shares. Citizens Community Credit Union’s main office is open Monday through Friday from 8:30 a.m. to 5 p.m. and Saturday from 9 a.m. to 12:30 p.m. For the location and hours of operation of the credit union’s branches, visit the Locations and Hours webpage.

Members with questions about Citizens Community’s operations may contact the credit union at 701-662-8118. Members with questions about the conservatorship may review the Citizens Community Credit Union Frequently Asked Questions posted on the NCUA website (opens new window). Members with questions about their Share Insurance Fund coverage can find more information on the Share Insurance Coverage (opens new window) section of NCUA’s MyCreditUnion.gov (opens new window) consumer website.

NCUA placed Citizens Community Credit Union into conservatorship because of unsafe and unsound practices at the credit union. While continuing normal member services, NCUA will work to resolve issues affecting the credit union’s operations.

Citizens Community Credit Union is a federally insured, state-chartered credit union with 11,399 members and assets of $201,255,973, according to the credit union’s most recent Call Report. Citizens Community Credit Union serves eligible members subject to the provisions of its bylaws, primarily encompassing the trade areas of Devils Lake, St. John, Bisbee, Ft. Totten, Lakota, Northwood, Larimore, and Grand Forks, North Dakota and East Grand Forks, Minnesota.

Member Deposits Insured up to $250,000, Member Services Uninterrupted

ALEXANDRIA, Va. (June 26, 2017) – The National Credit Union Administration today placed LOMTO Federal Credit Union in Woodside, New York, into conservatorship.

Member deposits at LOMTO Federal Credit Union remain federally insured by the National Credit Union Share Insurance Fund. Administered by NCUA, the Share Insurance Fund insures individual accounts up to $250,000, and a member’s interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund separately protects IRA and KEOGH retirement accounts up to $250,000. The Share Insurance Fund has the backing of the full faith and credit of the United States.

Normal member services at the credit union’s offices at 5024 Queens Boulevard in Woodside and 180 Riverside Boulevard, New York, New York, will continue uninterrupted.

NCUA placed LOMTO Federal Credit Union into conservatorship because of unsafe and unsound practices at the credit union. During the conservatorship, NCUA will work to resolve issues affecting the institution’s safety and soundness while maintaining normal member services.

Members who have questions about the conservatorship may review the LOMTO Federal Credit Union Frequently Asked Questions document attached to this release and available online here (opens new window). Members with questions about their Share Insurance Fund coverage can find more information in the Share Insurance Coverage (opens new window) section of NCUA’s MyCreditUnion.gov (opens new window) comsumer website.

Chartered in 1936, LOMTO Federal Credit Union serves multiple occupational and associational groups and communities primarily located in New York, New York. LOMTO Federal Credit union has 2,958 members and $236,468,882 in assets, according to the credit union’s most recent Call Report.

ALEXANDRIA, Va. (June 27, 2017) – President Donald J. Trump has designated Acting National Credit Union Administration Board Chairman J. Mark McWatters as the tenth Chairman of the NCUA Board, effective June 23.

“I thank President Trump for this honor and the trust he has placed in me,” McWatters said. “As Chairman of the NCUA, I remain committed to providing regulatory relief for the credit union community, in compliance with the Federal Credit Union Act, and to streamlining the operations of NCUA as a prudential regulator.”

“We best fulfill our obligation to protect America’s $1.3 trillion credit union community and its 108 million, largely middle-class, members, and the safety and soundness of the National Credit Union Share Insurance Fund by promoting a strong and vibrant system and by making the NCUA even more efficient, effective, transparent and fully accountable.”

McWatters was nominated to the NCUA Board by then-President Barack Obama on Jan. 7, 2014. Following Senate confirmation, he took office as an NCUA Board Member on Aug. 26, 2014. McWatters has served as Acting Board Chairman since Jan. 23.

“I am very pleased that Mr. McWatters has officially been designated as the Chairman of the NCUA by the President,” Board Member Rick Metsger said. “This recognizes his hard work and dedication to the mission of the agency and I look forward to our continued work together to provide access and financial safety to the over 100 million Americans who are part of the nation’s credit union system.”

Prior to joining NCUA’s Board, McWatters served as Assistant Dean for Graduate Programs and as a Professor of Practice at the Southern Methodist University Dedman School of Law and as Adjunct Professor at the university’s Cox School of Business. He also served on the Governing Board of the Texas Department of Housing and Community Affairs and on the Advisory Committee of the Texas Emerging Technology Fund.

McWatters served as a member of the Troubled Asset Relief Program Congressional Oversight Panel and as counsel to Rep. Jeb Hensarling (R-Texas). He also practiced law as a partner in three large cross-border law firms and as counsel to an international hedge and private equity firm, where he specialized in taxation, corporate finance, and mergers and acquisitions. He began his career as a judicial clerk to the Hon. Walter Ely of the Ninth U.S. Circuit Court of Appeals.

McWatters is licensed to practice law in Texas and New York and as a Certified Public Accountant in Texas. He holds a J.D. degree from the University of Texas at Austin School of Law and an LL.M degree from each of Columbia University School of Law and New York University School of Law.

NCUA Chairman’s Letter Stresses Cooperation to Ease Burdens on Credit Unions

ALEXANDRIA, Va. (July 6, 2017) – National Credit Union Administration Chairman J. Mark McWatters today wrote Consumer Financial Protection Bureau Director Richard Cordray to request CFPB provide a conditional exemption for credit unions with assets of more than $10 billion from its examination and enforcement authority.

Citing credit unions’ unique role in the financial system by virtue of their being not-for-profit institutions owned and controlled by members, McWatters said shifting examination and enforcement authority to NCUA offers numerous benefits from the current system, in which credit unions face unnecessary examination burdens and aggressive punitive fines.

“Subjecting federally insured credit unions and their consumer/member owners to the dual examination—and, in the case of federally insured, state-chartered credit unions, triple examination—regime mandated under Section 1025 of the Consumer Financial Protection Act imposes unnecessarily burdensome costs, particularly given their positive, consumer-focused role,” he said.

“I believe the CFPB and the NCUA can and should work together,” McWatters said. “As the prudential regulator of federally insured credit unions, the NCUA possesses a broader arsenal of enforcement tools than is available to the CFPB, allowing the agency to take more targeted actions to protect consumers and address consumer financial protection law violations.”

McWatters’ letter is available online
here (opens new window).

McWatters said this requested change would not affect CFPB’s exclusive rulemaking authority over federally insured credit unions, and the bureau would still be able to take enforcement action if it determined NCUA was not adequately enforcing consumer protection laws.

Section 1025 of the Consumer Financial Protection Act of 2010 gives CFPB primary enforcement authority for consumer financial protection law over insured depository institutions with assets of more than $10 billion. Six federally insured credit unions—Navy Federal Credit Union, State Employees’ Credit Union, Pentagon Federal Credit Union, Boeing Employees Credit Union, SchoolsFirst Federal Credit Union, and The Golden 1 Credit Union—have assets of $10 billion or more.

McWatters said shifting this authority would free up CFPB’s examination and enforcement resources to focus on larger investor-owned, for-profit institutions while continuing to provide consumer protections for credit union members.

“I believe granting federally insured credit unions an exemption from Section 1025 will help ensure they are treated fairly and equitably while also maintaining consumer protections and a level playing field for all parties involved,” McWatters said.

ALEXANDRIA, Va. (July 12, 2017) – The National Credit Union Administration Board has re-scheduled its July closed meeting.

The July closed meeting will be held Wednesday, July 19, beginning at 3 p.m. Eastern.

The July open meeting will still be held Thursday, July 20, beginning at 10 a.m. Eastern.

Both meetings were originally scheduled for Thursday, July 20.

Meeting agendas are available on NCUA’s Board Meeting Calendar and Actions webpage. The July open Board meeting, like all NCUA open board meetings, will be available on livestream from the agency’s website.

ALEXANDRIA, Va. (July 19, 2017) – The video recording of the June 23, 2017, open meeting of the National Credit Union Administration Board is now available on the agency’s website.

Archived videos of past Board meetings may be viewed here, and each video remains on the site for one year.

At the June open meeting, the Board unanimously approved five items:

• Publishing a request for comment in the Federal Register on proposed changes in the methodology determining the overhead transfer rate.
• A notice of proposed rulemaking proposing amendments to agency regulations to create more transparency and simplicity in agency regulations governing corporate credit unions.
• A final rule updating agency regulations regarding treatment by the NCUA Board, as liquidating agent or conservator of a federally insured credit union, of financial assets transferred by a credit union in connection with a securitization or loan participation.
• A final rule revising agency procedures for disclosing records under the Freedom of Information Act.
• A final rule adjusting civil monetary penalties for inflation, as required by Congress.

The Board also received a briefing from the Office of the Executive Director and the Office of the Chief Information Officer on the Enterprise Solution Modernization program.

NCUA posts these videos as part of the agency’s ongoing efforts to provide transparency and to allow those unable to attend Board meetings the opportunity to become better informed. An interval between the meeting and posting is necessary for the videos to comply with Section 508 of the Rehabilitation Act for the hearing and visually impaired.

The Board Actions page of NCUA’s website has more information, including Board agendas, which are posted at least one week in advance of each open meeting; copies of Board Action Bulletins, which summarize the meetings; copies of Board memorandums and other documents.

Board Action Bulletin

Estimated Distribution $600 Million to $800 Million; Normal Operating Level of Share Insurance Fund Would Rise; Budget Review Projects $5.8 Million Savings

ALEXANDRIA, Va. (July 20, 2017) – The National Credit Union Administration Board held its sixth open meeting of 2017 at the agency’s headquarters here today and unanimously approved three items:

• A request for public comment on the agency’s proposed plan to close the Temporary Corporate Credit Union Stabilization Fund in 2017, four years ahead of schedule, and provide credit unions with a Share Insurance Fund distribution in 2018, estimated to be between $600 million and $800 million.
• A Notice of Proposed Rulemaking amending the agency’s share insurance requirements rule to provide greater fairness, predictability, and transparency and add a temporary provision to govern share insurance equity distributions related to the Corporate System Resolution Program.
• A proposed rule to amend the agency’s definition of “in danger of insolvency” to give the agency more flexibility to act in cases of emergency mergers.

The Board also received briefings from the Chief Financial Officer on the revised 2017 agency budget estimates and the performance of the National Credit Union Share Insurance Fund.

Agency Proposes to Close Stabilization Fund in 2017

Credit unions would avoid a possible Share Insurance Fund premium in 2017 and receive a distribution in 2018 under a proposed plan, approved by the Board, to close the Temporary Corporate Credit Union Share Insurance Fund this year.

The proposed plan, described online here, is available for public comment. The NCUA must receive comments no later than Sept. 5. The NCUA will host an industry webinar on Wednesday, Aug. 9, to answer questions about the proposed closure plan. Details about the webinar and online registration will be available in the near future.

“The closing of the Stabilization Fund in 2017 allows the NCUA to return funds to credit unions that can be put to work in the system prior to the original closure date in 2021,” Board Chairman J. Mark McWatters said. “As part of this proposal, the NCUA would raise the Share Insurance Fund’s normal operating level to account for the remaining obligations of the Corporate System Resolution Program. Even with the proposed increase to the normal operating level, the NCUA is projecting a return of excess equity to insured credit unions through a distribution from the Share Insurance Fund in 2018. The proposed plan to close the Stabilization Fund, including increasing the normal operating level for the interim, will ensure the Share Insurance Fund has the appropriate level of resiliency to protect member deposits and maintain a safe and sound credit union system, including maintaining public confidence in federal share insurance.”

Several factors make the proposed closure of the Stabilization Fund this year possible:

• There are no longer any outstanding borrowings to be repaid to the U.S. Treasury, as the agency made the last payment to the Treasury Department in October 2016;
• The balance of the legacy assets that secure the NCUA Guaranteed Notes Program and the NGN investor balance are both lower than the $13.2 billion Share Insurance Fund; and
• Due to nearly $4 billion in net legal recoveries, the Stabilization Fund has a net positive position of $1.9 billion as of May 2017.

The proposed plan includes a staff recommendation that the Stabilization Fund closure be done Oct. 1, 2017, using the closing balances as of Sept. 30, 2017.

Even if the Stabilization Fund is closed, there would be remaining obligations of the Corporate Resolution Program. Those, the Board believes, can be prudently borne by the Share Insurance Fund without inordinate risk, provided the necessary equity is maintained.

Board Proposes Raising Share Insurance Fund Normal Operating Level

To maintain the necessary equity in the Share Insurance Fund after the Stabilization Fund closes, the Board proposes to increase the normal operating level for the Share Insurance Fund to 1.39 percent.

Should the Stabilization Fund close, assets would be transferred to the National Credit Union Share Insurance Fund, and the agency projects that transfer would raise the Fund’s equity ratio as high as 1.47 percent, requiring a distribution to credit unions.

Raising the normal operating level still would allow for a distribution to credit unions in 2018. It would also allow the Share Insurance Fund to withstand a moderate recession without the equity ratio dropping below 1.20 percent, at which point federal law requires the agency to charge a premium or develop a fund restoration plan. At 1.39 percent, the Board would also ensure credit unions’ one-percent contributed capital deposit is well-protected.

Questions and answers on the proposed change to the normal operating level are available online here.

Amendments to Share Insurance Distribution Rule Proposed

Credit unions would see greater fairness, predictability, and transparency under a Board-approved Notice of Proposed Rulemaking (Part 741) to accompany the Stabilization Fund closure plan.

The proposed rule amends the existing share insurance requirements rule would give federally insured credit unions greater transparency on how an individual credit union’s share of an equity distribution from the Share Insurance Fund would be calculated. The rule also would prohibit a federally insured credit union that terminates share insurance coverage from receiving a distribution for the calendar year in which that termination occurred.

Finally, the proposed rule would add a temporary provision governing equity distributions related to the Corporate System Resolution Program. The Board believes any such distribution should go first to repaying credit unions that paid special assessments rather than taking the form of a general distribution. A credit union that had not paid a special assessment would not be eligible to receive a distribution related to the Corporate System Resolution Program unless all other corporate assessments have been repaid.

Comments on the proposed rule, available online here (opens new window), must be received no later than Sept. 5.

2017 Mid-Year Budget Review Projects $5.8 Million in Savings

The NCUA’s Chief Financial Officer reported that agency expenditures are estimated to decline by approximately $5.8 million for 2017, based on current projections of agency needs.

The NCUA’s revised 2017 operating budget estimate is now $292.2 million. Reduced spending was noted for the following expense categories:

• A $2.5 million reduction in pay and benefits, based on factors such as the hiring freeze earlier this year, employee turnover, and projected hiring and attrition rates.
• A $1.4 million reduction in travel costs.
• A $1.2 million reduction in contracted services.
• A $516,000 reduction in administrative costs.
• A $122,000 reduction in rental costs.

These funds will be reserved as a contingency for anticipated costs to implement agency restructuring initiatives. No Board action is required with respect to the NCUA budget, and no reduction to the Operating Fund budget is recommended.

The NCUA currently operates on a two-year budget cycle. The 2018 budget is scheduled to be reviewed at the Board’s November open meeting. The agency plans to host a public budget briefing in the fall.

As part of its ongoing commitment to transparency in the budget process, the NCUA continues to make detailed budget information publicly available on its Budget and Supplementary Materials webpage.

Share Insurance Fund Reaches Net Position of $13 Billion

The Share Insurance Fund in the second quarter of 2017 posted net income of $49.3 million, primarily due to a decrease in the provision for insurance losses.

The fund’s net position was $13.0 billion at the end of the quarter.

Second-quarter investment and other income was $49.2 million. Operating expenses were $49.4 million. The provision for insurance losses decreased by $49.5 million.

As of June 2017, the calculated equity ratio is 1.22 percent, based on estimated insured shares of $1.1 trillion. However, when adjusted for the projected one-percent deposit capital adjustment recognized in September, for all federally insured credit unions with assets of $50 million or greater, the equity ratio is estimated to remain at 1.26 percent.

• The number of CAMEL codes 4 and 5 credit unions increased by 6.6 percent from the first quarter of 2017, to 210 from 197.
• Assets in CAMEL codes 4 and 5 credit unions increased 11.6 percent from the first quarter to $10.6 billion from $9.5 billion.
• The number of CAMEL code 3 credit unions declined 1.3 percent from the first quarter to 1,088 from 1,102.
• Assets in CAMEL code 3 credit unions declined 1.7 percent from the first quarter to $53.6 billion from $54.5 billion.

There were no credit union failures during the second quarter of 2017, compared to six credit union failures in the second quarter of 2016. Year-to-date, two federally insured credit unions failed during the first two quarters of 2017, compared to 11 in the first two quarters of 2016. Total year-to-date losses associated with credit union failures are $3.8 million, compared to $8.5 million in the first two quarters of 2016. Fraud was a contributing factor in one of the two failures.

The second-quarter figures are preliminary and unaudited.

Definition Change Would Give Agency More Flexibility in Emergency Mergers

The NCUA would have additional flexibility in situations warranting emergency mergers under a proposed rule (Part 701) approved by the Board.

The proposed rule would amend the definition of the phrase “in danger of insolvency” in the agency’s Chartering and Field of Membership Manual. The current definition requires credit unions to fall into at least one of three net worth categories over a period of time in order to be found in danger of insolvency. The proposed rule would lengthen by six months the time period for two of those categories. The proposed rule would also add a fourth category, to include credit unions that have been granted or received Section 208 assistance within the 15 months before a determination of a danger of insolvency has been made.

Comments on the proposed rule, available online here (opens new window), must be received within 60 days of publication in the Federal Register.

NCUA tweets all open Board meetings live. Follow

@TheNCUA (opens new window) on Twitter, and access Board Action Memorandums and NCUA rule changes at

www.ncua.gov. NCUA also live streams, archives and posts

videos of open Board meetings online.

ALEXANDRIA, Va. (July 21, 2017) — Registration is now open for the National Credit Union Administration’s Aug. 9 webinar discussing the agency’s proposed plan to close the Temporary Corporate Credit Union Stabilization Fund.

You can register online here (opens new window). The webinar is scheduled to begin at 2 p.m. Eastern, and there is no charge to attend.

You will use this same link to log into the webinar, and you should allow pop-ups from this website. Once you are registered, you can submit questions in advance at [email protected]. The email’s subject line should read, “Stabilization Fund plan.”

Larry Fazio, Director of Examination and Insurance, and Rendell Jones, Chief Financial Officer, will discuss the agency’s proposal to close the Stabilization Fund and provide credit unions with a distribution in 2018. They also will take questions about the proposed plan. This webinar is not intended to field credit union stakeholder’s comments on the plan. Those should be submitted through the usual agency process.

Details on the NCUA’s proposed plan to close the Stabilization Fund are available online here.

If you have technical questions about accessing the webinar, you may email [email protected].

This webinar will be closed captioned and then archived online here approximately three weeks following the live event.

Regional Offices Will Consolidate; Staffing Will be Reorganized

ALEXANDRIA, Va. (July 21, 2017) — Greater efficiency, responsiveness, and cost-effectiveness are goals of a long-range agency restructuring plan the National Credit Union Administration Board announced today.

“The time has come for the NCUA business model to change,” Board Chairman J. Mark McWatters said. “Positioning the NCUA to meet the changing demands of the credit union system we regulate in a transparent and fully accountable manner while promoting efficiency and effectiveness is essential. Re-evaluating our operations is integral to fulfilling our statutory responsibilities to protect the deposits of the nearly 108 million credit union members while maintaining the safety and soundness of the Share Insurance Fund and the viability of the credit union system.” 

“Months of very hard work by agency staff have produced a solid, commonsense plan that will help the agency respond to a new economic environment without sacrificing its ability to ensure the safety and soundness of our credit union system,” Board Member Rick Metsger said. “The restructuring effort will come together over a period of years, and credit unions will reap tangible benefits from our work.”

The agency created internal review teams in late 2016 to rethink the agency’s operations, discuss how it can re-tool to do its job better, and make recommendations to the Board. Among the recommendations the Board approved are:

• Consolidate the agency’s five regional offices into three by closing the Albany, New York, and Atlanta, Georgia offices and eliminate four of the agency’s five leased facilities;
• Create an Office of Credit Union Resources and Expansion by redefining and realigning chartering and field-of-membership, credit union development, grants and loans, and minority depository institutions programs;
• Restructure the Office of Examination and Insurance into specialized working groups; and
• Realign the Asset Management and Assistance Center to include changes to the servicing business model and moving to a financial supervisory structure.

NCUA also plans to eliminate agency offices with overlapping functions and improve functions such as examination reporting, records management, and procurement. The proposed plan anticipates a reduction in the agency’s workforce by attrition.

Additional details of the agency’s plan, including projected cost savings, will be available at the upcoming fall budget briefing. The most recent agency restructuring occurred in 2003.