Letter outlines risk-based extended exam cycle

Jan. 4, 2017 -- Most federally insured, state-chartered credit unions will receive an NCUA exam based on risk, and at least once every five years, according to a “letter to credit unions” issued by the agency last week outlining the steps the agency is taking to “permit an extended examination cycle.”

Additionally, the letter (LTCU 16-CU-12) outlines the exam scheduling for federal credit unions as well.

FISCUs subjected to more frequent exams would fall under any of three criteria outlined in the letter, and will receive NCUA insurance examinations that start between eight and 12 months from the prior exam date. The criteria for those FISCUs are:

  • The credit union holds assets of greater than $1 billion;
  • The credit union has a composite NCUA CAMEL 4 or 5 code and assets greater than $50 million;
  • The credit union has a composite NCUA CAMEL 3 code with assets greater than $250 million.

“NCUA will make every effort to conduct examinations of federally insured state-chartered credit unions jointly with the appropriate state supervisory authority,” the agency states in the letter. “Only when a joint examination cannot be coordinated would NCUA conduct an independent insurance review.”

The NCUA letter also noted that a joint NCUA-state supervisory authority working group is being formed to “evaluate and recommend further changes to the agency’s examination program for federally insured, state-chartered credit unions.”

NASCUS has developed and posted a summary of the letter.

LINKS:
NASCUS Summary: NCUA LTCU 16-CU-12 (members only)

Text of NCUA LTCU 16-CU-12