ARLINGTON, Va.—The nation’s credit union leaders would prefer to return to an 18-month examination cycle, although they do believe examiner competency is improving.
Those are two findings from NAFCU’s August Economic & CU Monitor, which features results of a special-topic survey on credit unions’ examinations.
Most of the NAFCU members responding to the survey (88.9%) said they would consider it a form of regulatory relief to return to an 18-month exam cycle. More respondents today (25%, up from 2.9% last year) think their examiners are now more competent than previous ones.
A greater share of credit union respondents (66.7%, up from 27.5% last year) think the Documents of Resolution received in connection with exams were unjustified. The greatest area of examiner focus in terms of safety and soundness was data security (68%) and asset/liability management (44%), the survey indicated.
As for areas related to consumer regulations, respondents said that the greatest examiner focus was in lending and modification policies (68.2%), followed by Bank Secrecy Act (18.2%). The most common impact of respondents’ exams was the need to update or institute new procedures (69.2%).
Other highlights from the NAFCU report:
- The housing market is solidifying, and there are signs that first-time homebuyers are returning to the market. As a result, NAFCU is forecasting originations to grow 13% in 2015, but to moderate somewhat next year due to lower refinance activity.
- Inflation has been weak and shows few signs of improving in the near term, but that will probably not prevent the Fed from raising interest rates in September, NAFCU said.
- Net worth ratio (10.92%) and loan to share ratio (75.68%) continued their steady climb higher in recent months.
- Net interest margin fell to 2.84% in March from 2.89% in May
- Loan growth fell to 10.64% from 10.79% in May.