Small CU committee shares merger, CECL concerns with NCUA

April 12, 2019

CUNA’s Small Credit Union Committee wrote to NCUA about merger trends, the current expected credit loss (CECL) standard and other issues this week. The letters follow a meeting between the committee and Larry Fazio, director of NCUA’s Office of Examination and Insurance that took place at this year's CUNA Governmental Affairs Conference. 

A major topic of discussion during the meeting, and in the letter, is the fact that 90% of credit union mergers are credit unions under $100 million in assets.

“Our top-line concern around this trend stems from what the impact of the loss of those credit unions will mean in their respective communities and membership groups,” wrote Teri Robinson, chair of CUNA’s Small Credit Union Committee and president/CEO of Ironworkers USA FCU, Portland, Ore.

The committee also thanked NCUA for its efforts taken to provide relief for small credit unions regarding examinations, including through the small credit union exam, longer examination cycle and forgoing the ACET test for credit unions under $250 million in assets, while also reiterating concerns related to exams, including any potential changes brought by the agency’s examination modernization efforts.

The letter urges NCUA to create a resource, whether webinar or white paper, to assuage small credit union fears that they will not have the capabilities to change to the CECL standard, and calls attention to the fact that even slight changes with how non-member deposits are regulated could yield “significant benefits for all sizes of credit unions.”

This would include raising the maximum level of non-member deposits allowed.