NWCUA Regulatory Advocacy Update: Association Meets with NCUA Region V Leadership

Dialogue with NCUA Region V Leadership and Members Leads to Promising Takeaways

The Northwest Credit Union Association (NWCUA) recently joined neighboring leagues and associations in meeting with National Credit Union Administration (NCUA) Region V leadership. The Association organized the meeting to bring together voices from across Region V for a frank discussion of current and emerging issues, concerns, questions, and suggestions to improve communication and partnership throughout the region. This results in valuable takeaways for all sides.

Region V Director Liz Whitehead was accompanied by Cherie Freed, associate regional director of operations, and Mike Dyer, associate regional director of programs, who were able to speak candidly and take action items back to examiners. Joining them were representatives from the state leagues from Hawaii, Idaho, Montana, New Mexico and Utah, as well as the Mountain West Credit Union Association (Arizona, Colorado and Wyoming), and the former (and potentially future) Region V California/Nevada League.

Overwhelmingly, the group expressed its deep concern about overregulation and the cost of compliance. While this is an issue largely dealt with by the NCUA board of directors, it was important to participants that the regional team understands the pressures credit unions are feeling every day.

There was considerable discussion about the use of documents of resolution (DORs), which resulted in a promise from Whitehead to immediately send a memo to examiners instructing them not to put items in DORs that aren’t serious. NCUA regional staff pointed out that the inclusion of less-than-serious items in DORs may result from new examiners trying to document everything, rather than limiting notes to “serious safety and soundness issues and compliance failures.” The term “consider” and those “nice-to-have” issues should not be included in DORs. Whitehead also promised to add this issue to an upcoming training session with examination staff.

Credit unions should also know that they have the right to discuss and ask for changes or clarifications to items in a DOR before agreeing to it. Credit unions should question DORs that include inappropriate findings or findings that are not well-cited, and if resolution is not reached at the examiner level, credit unions have every right to escalate concerns to ensure a clear understanding of the DOR.

The use of “best practices” in exams was also discussed. The NCUA team acknowledged that examiners should not be citing best practices and should instead cite statutes or rules. While this has been a point of discussion with examiners in the past, this issue will be addressed by NCUA leadership again, as proposed regulations and legislation are not regulations and should not be treated as such.

Another discussion topic was fear of retribution and retaliation. The NCUA has a zero tolerance policy, but this fear remains a concern for credit unions. Credit unions are welcome to work anonymously through the Association if they have concerns. Another league cited a recent success in which it was able to help manage the process and communication around examination concerns. The NCUA regional group also stated that they are ready and willing to step into the process when needed.

Another specific area of concern addressed was how a credit union should be defining concentration risk and determining how much is too much. The regional NCUA team agreed that there cannot be a definitive level of risk set but that each credit union must have a well-devised policy and plan in place to deal with concentration risk for their specific credit union—not one based on national, regional or industry standards.

Whitehead expressed a desire for examiners to meet and get to know credit unions on a non-exam level in an effort to build relationships. The Association will be providing a schedule of upcoming chapter meetings to the supervisory examiners and helping to coordinate this effort.

“We truly appreciated the conversation and openness of Liz and her team, as well as the participating leagues in NCUA Region V,” said Jaycee Winn, director of regulatory advocacy for the NWCUA.

CFPB Extends Deadline for Comments on Inherited Regulations

The CFPB has extended the deadline for the “comment on the comments” period of its request for input on the regulations inherited from seven federal agencies. Comments were accepted in a first round through early March, and while 30 days were originally given for stakeholders to review and comment on those initial comments (whew, lots of commenting here!), that deadline has been extended to early June.

“With 120 comments received, a 30-day turnaround would have been a challenge indeed,” Winn said.

To review those initial comments or the original request, visit the NWCUA’s comment call page here.

To offer feedback, click here.

 

The NWCUA Regulatory Advocacy team works with state and federal regulators to help reduce the regulatory burden on credit unions and protect the credit union movement. The Association encourages members to participate in the regulatory process. If you have any questions on these or any regulatory issues, please contact Director of Regulatory Advocacy Jaycee Winn at jwinn@nwcua.org, or at 800.995.9064 x209.

Posted in Advocacy News, NCUA, NWCUA.