DENVER (7/15/15)--“Nobody looks forward on a Monday morning to a week with the examiner on site,” Martin Stewart offered Tuesday during the breakout session “How to Work with Your Regulator,” at the co-hosted America’s Credit Union Conference and World Credit Union Conference in Denver.
But Stewart, director of banks, building societies and credit unions for the Bank of England’s Prudential Regulator, and other panelists had an additional message: “Examiners are human,” Stewart said.
Indeed, John Kutchey, deputy executive director of the National Credit Union Administration, reminded the audience that the examination process involves people with different communication styles.
“The best exams are those in which the credit union views the regulator as more of a partner making a health check, if you will,” Kutchey said. “They’re actually looking forward to getting the results of the examination so they have more information points to help them in the development process of the credit union.”
Kutchey said both the examiner and the credit union representative, be it a CEO or an internal auditor, want the same result: a sound, safely run credit union.
“We try to train our examiners to look at the call reports each quarter and pick up the phone and call their credit unions and discuss if they see any emerging concerns or issues that they need more information on,” Kutchey said. “On site they should sit down with the CEO or the key contacts and talk through what will be the best way to run the examination, what the credit union’s preferences are, what the staff’s availability is, and how they can communicate through that process.”
Kutchey acknowledged that credit unions “have to live with the end result” of exams. He said the NCUA is currently working to make exams less prescriptive in their recommendations.
“While our examiners are trained to provide ideas and recommendations at the end of the day, it comes down to trying to find some common ground on what the solutions will be.”
He recommended that between exams credit unions use the NCUA as a touch point for information. “The best relationships between the NCUA and the credit union are ones where the credit union views that agency in more of a consulting-type role,” Kutchey said.