NCUA to Create Office of National Examinations and Supervision

New office will open its doors Jan. 1, 2013.

July 26, 2012

NCUA will create a new Office of National Examinations and Supervision in 2013 that will oversee credit unions with more than $10 billion in assets and corporate credit unions.

“One-size-fits-all supervision is simply no longer appropriate in a credit union industry with nearly 100 million members and more than $1 trillion in assets,” says NCUA Chairman Debbie Matz. “Supervising a $10 million credit union the same as a $10 billion credit union doesn’t make sense. As we all know, larger risks have wider consequences.”

The new office will open Jan. 1, 2013.

Matz says NCUA currently spends 45% of examination hours on credit unions with less than $50 million in assets, yet this group holds only seven percent of overall industry assets.

Meanwhile, the largest credit unions—those with more than $1 billion in assets—hold 47% of industry assets and receive 10% of examination hours, she says.

NCUA will concentrate more hours and more attention where more of the industry’s risk is held. The reallocation of examiner resources from smaller credit unions to the largest institutions means examiners will spend less time in well-performing small credit unions, Matz says.

“Fewer credit unions are holding more and total assets,” she says. “The new office will be dedicated to the challenges of supervising the largest credit unions, promoting consistency of exam practices.

“In addition, this office will leverage national and regional expertise to promote high-quality evaluations of risk and risk management practices. This is not about keeping credit unions from getting too big to fail; it’s about keeping them from failing.”

In the coming months, NCUA also will consider plans to:

  • Broaden the definition of a “small” credit union so more credit unions can receive regulatory relief and technical assistance from the agency;
  • Expand the districts that comprise rural fields of membership;
  • Approve the use of video teller machines to reach new employee groups and underserved areas;
  • Allow credit unions to buy Treasury Inflation Protected Securities; and
  • Increase the maximum application fee for short-term small loans to be more cost-effective and permit more credit unions to offer a consumer-friendly alternative to payday loans.

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