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NCUA Board Approves Budget, Adopts Exam Flexibility Recommendations
Friday, November 18, 2016 6:45 AM

The National Credit Union Administration held its regularly scheduled board meeting Thursday morning. The agenda included the third quarter Share Insurance Fund Report; a Final Rule, Part 705, Community Development Revolving Loan Fund (CDRLF); adoption of the 2017/2018 operating budget; and board briefings on the 2017 Overhead Transfer Rate and Share Insurance Fund Equity Ratio Projections and 2017 Premium Range. 

The 2017/2018 Budget and Exam Flexibility
The newly adopted 2017 budget is 1.6 percent less than the budget approved in November 2015. The 2017 and 2018 budgets will include 1,230 and 1,208 full-time employees, respectively, with staffing reductions coming from attrition. The NCUA board will hold a mid-year budget review in July 2017. 

The board has also adopted the agency's Exam Flexibility Initiative working group's recommendations for an extended examination cycle for well-managed, low-risk federal credit unions with assets of less than $1 billion beginning next year. The working group, led by Region IV Director C. Keith Morton, released its recommendations for improving NCUA's exam program in October. 

Four recommendations will be effective at the start of 2017, including:

  1. An extended exam cycle for well-managed, lower-risk federal credit unions;
  2. Targeted examinations of certain small credit unions that lack internal controls and have not been examined in at least five years;
  3. Enhanced coordination of exams for federally insured, state-chartered credit unions; and
  4. Establishment of an NCUA and state supervisor working group.

According to Chairman Rick Metsger, "While the Exam Flexibility Initiative changes will result in an extended exam cycle for most credit unions, I want to reiterate that they do not change our statutory obligation to protect the safety and soundness of the system and the Share Insurance Fund. Accordingly, one of the initiative's provisions that applies to all federally insured credit unions, regardless of their charter, is that the agency reserves the right embedded in the Federal Credit Union Act to examine any federally insured credit union at any time. There is no guarantee or right to an extended exam cycle-the system is simply designed to be flexible. When an exam or supervisory contact is needed, it will be conducted."

NCUA has released a full report along with a comprehensive list of frequently asked questions and a summary of stakeholder comments. 

Visit the Exam Flexibility Initiative's webpage.

View Chairman Metsger's complete statement on the passage of the NCUA budget.