Compliance: NCUA, 6 state regulators launch pilot program

December 17, 2018

NCUA announced last week that it and six state credit union regulators will launch an alternating examination pilot program for a select group of federally insured, state-chartered credit unions. According to the agency, the program is based on its 2016 Exam Flexibility Initiative report, and will run for one full alternating cycle of approximately three years.

The six participating state regulators are the California Department of Business Oversight, the Florida Division of Financial Institutions, the New Hampshire Banking Department, the Oklahoma State Banking Department, the South Carolina Office of the Commissioner of Banking and the Texas Credit Union Department. The credit unions for the program have been chosen. 

The NCUA has posted frequently asked questions about the pilot program on its website. Additional information specific to each state’s program will be available in the near future.

The pilot will evaluate three alternating examination program approaches:

  • Alternating lead: NCUA and state regulators conduct joint examinations of federally insured, state-chartered credit unions, alternating which agency serves as lead each cycle;
  • Alternating with limited participation: NCUA and state regulators alternate conducting examinations with some involvement from the other agency; and
  • Alternating: NCUA and state regulators alternate conducting examinations independently.

The pilot program is designed to help NCUA and state regulators determine how an alternating examination program could improve coordination and make the best use of federal and state resources.

The pilot program is the result of ongoing work by a joint NCUA-State Supervisor working group comprised of representatives from the NCUA, several state regulators, and the National Association of State Credit Union Supervisors.

The working group studies ways to improve supervisory efficiencies, maintain a sound supervisory program, and reduce the burden on federally insured, state-chartered credit unions.

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