Metsger takes aim at annual exam requirement

May 12, 2016 – A review of the NCUA examination process – including the frequency of exams – is being initiated by new NCUA Board Chairman Rick Metsger, as outlined in his first speech today as agency leader.

In remarks to the Idaho Credit Union League, Metsger said his priority at the agency is on “continual quality improvement” to meet the agency’s statutory responsibility to examine credit unions for safety and soundness with “as small a footprint as possible.”

“To begin this process, we must first remove the requirement that every federal credit union, and all federally insured, state-chartered credit unions with more than $250 million in assets, be examined each calendar year. This prescriptive requirement creates a logjam of exams at the end of each year, which is neither effective nor efficient,” Metsger said, according to a press release from the agency.

The new NCUA Chairman (who was named to the position only last week) told the group that his goal is to make the change from the annual requirement within the next two months. According to the NCUA release, he added that removing the calendar year requirement will not alter the general objective of examining credit unions every 12 months, but is a “necessary first step toward establishing an extended examination cycle for well-managed, financially sound credit unions.”

To start the process, Metsger said he will form an internal working group, similar to that which developed the agency’s proposed field-of-membership rule. According to the NCUA release, he said that would allow the agency to “hear from stakeholders and make further changes to the examination process ‘sooner rather than later.’”


NCUA release on Metsger review of exam process