Yearend 2017 likely soonest for longer exam cycle: Matz

March 11, 2016

WASHINGTON (3/11/16)--The National Credit Union Administration (NCUA) board will be in a better position to consider an extended examination cycle once new processes and procedures are in place by the end of 2017, agency Chair Debbie Matz wrote Thursday. Matz’s letter came as a response to a letter signed by more than two dozen U.S. house members from both parties in February urging the agency to extend its examination cycle for well-run credit unions.

 “An extended examination cycle might run longer or shorter than 18 months depending on the effectiveness of the systems we build and the need to ensure safety and soundness,” Matz wrote. “I believe the board should ensure these improved systems and processes are in place and operating properly before the board makes any decision to extend the examination cycle.”

Reps. Frank Guinta (R-N.H.) and Ruben Hinojosa (D-Texas) spearheaded the effort to get their colleagues to sign the letter to the NCUA, saying an extended cycle would help with regulatory relief for the credit union industry.

Lengthening the exam cycles for credit unions has been a top priority for the Credit Union National Association (CUNA). CUNA's examination and supervision subcommittee, chaired by Cooperative Credit Union Association President/CEO Paul Gentile, helped coordinate the letter from Guinta and Hinojosa.

In her response, Matz also cited the agency’s 2016 exam cycle and budget already being in place as one reason for a delay. In addition, the NCUA is in the process of updating call report and examination software platforms.

 “One of the goals of these system improvements is to enable examiners to conduct more examination steps off-site, reducing on-site examination time by as much as half,” Matz wrote.

Matz previously said it would take the agency at least one supervision cycle with the agency’s recent regulatory relief changes in place before the cycle could be extended to anyone.