National Credit Union Administration establishes new exam office

July 30, 2012 at 3:25 pm 1 comment

Debbie Matz, Chairman of the National Credit Union Administration (NCUA) announced a new Office of National Examinations that will focus on examining the largest credit unions starting in 2013.  In an address to the National Association of Federal Credit Unions, Matz said that a disproportionate amount of NCUA’s resources are devoted to small credit unions, while the largest credit unions need more scrutiny.  She also said that the office will be evaluating the threshold that is currently used to define “small” credit unions (assets less than $10 million). Moving forward, these credit unions will only be subjected to a 40-hour examination.

The timing of this announcement raises questions about the NCUA’s role in evaluating state-chartered credit unions. In North Carolina, the NCUA began performing examinations of state-chartered credit unions this year, when in years past the state regulatory agency, the North Carolina Credit Union Division (NCCUD), performed the evaluations and NCUA only stepped in when deemed necessary. Now, the state’s credit unions must face two examinations– from the NCUA and NCCUD– which, particularly for the smaller credit unions, has been a significant burden. The amount of time that credit unions have to devote to these examinations has impacted their ability to serve their members.

Reorganization of the NCUA’s regulatory offices is a step toward properly assesing the unique needs, challenges, and strengths of credit unions of different sizes. However, at least in North Carolina, the NCUA seems to be creating inefficiencies instead. NCUA’s decision to perform their own exam ignores the impact of dual exams on the state’s credit unions. The reorganization and refocus on credit unions of different sizes is a step forward for credit unions overall, but will mean little in North Carolina until the issue of dual examinations is resolved.

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