ALEXANDRIA, Va.–NCUA Chairman Debbie Matz told Congress that it will be the end of 2017 before the agency will be able to decide if it can move to an 18-month exam cycle for some credit unions.
NCUA is in the process of installing new processes, procedures and technology, according to Matz, who sent a letter to Congress in response to an earlier letter from more than two-dozen members of the House that urged it to extend the exam cycle for well-run credit unions.
“An extended examination cycle might run longer or shorter than 18 months depending on the effectiveness of the systems we build and the need to ensure safety and soundness,” Matz wrote. “I believe the board should ensure these improved systems and processes are in place and operating properly before the board makes any decision to extend the examination cycle.”
Matz told Congress the agency’s 2016 exam cycle and budget are already in place, which is delaying implementation, as is the process of updating call report and examination software platforms.
“One of the goals of these system improvements is to enable examiners to conduct more examination steps off-site, reducing on-site examination time by as much as half,” Matz wrote.
In response, CUNA thanked Matz for reiterating her “commitment” to developing an 18-month examination cycle for well-run credit unions.
CUNA President/CEO Jim Nussle further welcomed Matz’s willingness to consider an extension beyond 18 months.
The trade association re-emphasized its position in response to Matz’s letter, which was a response to an effort led by Rep. Frank Guinta (R-NH).
“CUNA stands ready to help the NCUA implement a longer exam cycle at the earliest possible time," Nussle said. “The biggest problem for credit unions here is that the burden of regulatory and exam requirements in general is putting increasing pressure on credit union resources and that should be addressed as soon as possible."
Matz previously said it would take the agency at least one supervision cycle with the agency’s recent regulatory relief changes in place before the cycle could be extended to anyone.
NAFCU, too, has re-emphasized its position, once again calling for an 18-month exam cycle for well-run credit unions.