Likely extended exam cycle in 2017 speeds reg relief: CUNA

June 9, 2016

The NCUA hopes to have changes in place to the examination cycle by 2017, Chair Rick Metsger said in a letter sent Wednesday to Rep. Jeb Hensarling (R-Texas), chair of the House Financial Services Committee. CUNA Chief Advocacy Officer Ryan Donovan said he is glad the agency is prioritizing these changes, and thanked NCUA for looking to make changes earlier than expected.

“CUNA and credit unions have pushed for an extended examination cycle for a long time and we’re very glad to see the NCUA has a target date, one that is closer than anticipated,” Donovan said. “Regulatory relief cannot come soon enough for credit unions, and the NCUA’s decision to move quickly on this is a testament to how badly it’s needed.”

Hensarling unveiled an alternative bill to the Dodd-Frank Act Tuesday, and one provision called for making the exam cycle 18 months for credit unions. In his response, Metsger said the NCUA can alter its exam cycle without statutory change, which it plans to do.

“While the exam cycles for federally insured banks and thrifts are set in law, the Federal Credit Union Act currently gives the NCUA board the flexibility to adjust the exam cycle without the passage of additional legislation by Congress,” Metsger wrote. “Now that the economy and the credit union system have stabilized, I believe that the NCUA board should act thoughtfully and promptly to modify the exam cycle for federally insured credit unions.”

Metsger said the NCUA’s working group on examination changes will be making a recommendation to the board by September, and that he plans to move expeditiously on that recommendation with the expectation that changes will be in place for the 2017 exam cycle.

Within days of becoming the NCUA chair, Metsger announced his intent that the agency take a comprehensive look at the exam cycle.

CUNA has been a longtime advocate for extending the exam cycle, and President/CEO Jim Nussle said the NCUA’s review will be good for credit unions.

CUNA has a long-term strategy in place for the process, which includes collecting feedback from credit unions and ensuring member credit unions have the information they need to stay on top of the latest developments.

In addition, Donovan has urged credit unions to continue to submit feedback on the process and other information as needed.

Metsger also wrote to Rep. Frank Guinta (R-N.H.) this week about the exam changes. Guinta, along with Rep. Ruben Hinojosa (D-Texas) and in coordination with the Cooperative Credit Union Association, sent a letter to the NCUA signed by 30 lawmakers asking the agency to extend the exam cycle.