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Metsger: NCUA to Remove Annual Exam Requirement
Friday, May 13, 2016 6:50 AM

New NCUA Chairman Rick Metsger said Thursday that within the next two months, the NCUA intends to remove the requirement that all federally insured, state-chartered credit unions with more than $250 million in assets be examined each calendar year.

In a speech prepared for the Idaho Credit Union League, Metsger also said he is forming a working group to review the overall examination process, including the frequency of exams.

Metsger said he wants to look at how to reduce the amount of time examiners spend onsite at credit unions, as well as the frequency of examinations when performance standards for safety and soundness justify a longer cycle.

"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," Metsger said. "This prescriptive requirement creates a logjam of exams at the end of each year, which is neither effective nor efficient."

NCUA Board Member J. Mark McWatters has already endorsed the idea of extending the examination cycle and several members of Congress have endorsed it as well.

Suzanne Yashewski, SVP regulatory compliance counsel for Cornerstone supports the NCUA action saying, “We commend NCUA for taking another step to reduce regulatory burdens. The new exam schedule permits credit unions with a history of safe and sound practices to focus more time on serving their members. We encourage credit unions to continue to share with us specific examples where regulatory relief is needed, as there is still more work to be done here.”   

"Reducing the frequency of examinations for credit unions would remove some unnecessary pressure on credit union resources—resources that can better be used to serve members," said Credit Union National Association President/CEO Jim Nussle. "Such an action by the agency would also be both prudent and appropriate as it would refine the cycle to be more consistent with the examination cycle for banks. We thank Chairman Metsger for acting on this important issue just days after taking the reins of the agency."