NCUA Gives Notice of Changes to the Examination of Small Credit Unions

In letter 12-FCU-03, the National Credit Union Administration (NCUA) highlighted its new Small Credit Union Examination Program (SCUEP) for credit unions with less than $10 million in assets.

In order to qualify for the program, a federally chartered credit union must be well-run (CAMEL rating of 1, 2 or 3) and under the $10 million asset mark. In a move to align resources more closely with risks, small credit unions that are financially and operationally sound will have shorter examinations and more concise examination reports.

Under the program, the NCUA is only allocating 40 hours per year to SCUEP credit unions and will be looking primarily at lending, recordkeeping and internal audit functions. According to the NCUA, SCUEP credit unions will see:

  • Examination time commensurate with credit union size, structure and risk profile;
  • Emphasis on improved communication with management;
  • Focus on issues and risks relevant to the credit union;
  • Optional meetings with the board of directors for qualifying credit unions;
  • Customized examination reports; and
  • Additional supervision where appropriate.

Credit unions should note, however, that even if they qualify for a reduced examination burden under this new rule, the NCUA does have the authority to expand the scope of an exam or exclude an otherwise-qualifying federal credit union, if necessary.

The letter also addresses services the Office of Small Credit Union Initiatives can provide to credit unions enrolled in the National Small Credit Union Program. These services are free and can help the credit union address issues in strategic planning, lending, policy development and recordkeeping, among others.


Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, Compliance News, NCUA.