The NCUA board listens to a staff presentation on its Enterprise Solutions Modernization program. (CUNA Photo)

NCUA program upgrades could help prepare for extended exam cycle

March 25, 2016

ALEXANDRIA, Va. (3/25/16)--The National Credit Union Administration (NCUA) approved two temporary management positions Thursday to beef up its Enterprise Solutions Modernization (ESM) program, a program agency staff believes could help lead to a longer examination cycle.

John Kutchey, NCUA’s deputy executive director, said the changes will make an extended examination more feasible, but added that the decision to extend the cycle rests solely with the board.

In its action Thursday, the board authorized $75,000 to be provided annually for the next four years for the two positions. The agency emphasized that the action will not lead to a net staff increase, as the NCUA will eliminate two full-time positions to offset the new expense.

The NCUA is predominantly funded by the credit unions it oversees, and those credit union funds ultimately represent their members' monies. The Credit Union National Association (CUNA) has long advocated for the NCUA to seek ways to contain and reduce its budget, particularly with the credit union system being very healthy.

“We’re glad to see the NCUA move forward with much needed upgrades that should ultimately reduce the regulatory burden on credit unions," said Elizabeth Eurgubian, deputy chief advocacy officer for CUNA.

The new ESM positions are to coordinate projects approved in the most recent NCUA operating budget for a series of technology information initiatives. These include the next generation of upgrades to examination and information gathering systems; modernizing NCUA’s data storage and infrastructure; and changes to document management policies and practices.

According to the NCUA, the upgrades will allow credit unions to request field-of-membership expansions, view member complaints, file call reports, apply for grants, make payments and complete a number of other actions through a single user interface.

Examiners will be able to review all information about their assigned credit unions from one off-site location and will have better analytics available to target their review. The NCUA expects the upgrades will allow for more flexibility and better tools to support field staff working off-site, resulting in reduced travel costs and on-site examination times.

NCUA Chair Debbie Matz previously said the agency would be willing to look into extending the examination cycle once the current slate of regulatory relief rules become effective, possibly by the end of 2017.

Lengthening exam cycles for credit unions is a top priority for CUNA. CUNA’s Examination and Supervision Subcommittee helped coordinate a letter from several legislators to the NCUA, requesting an extended cycle.