Top Credit Union Regulator Announces New Office of National Examinations and Supervision

Saying a “one-size-fits-all approach” to regulation is no longer appropriate in the credit union industry, National Credit Union Administration (NCUA) Chairman Debbie Matz told the NAFCU Annual Conference today that the agency will reallocate existing resources to focus on the largest credit unions and protect the share insurance fund from losses.

“Supervising a $10 million credit union the same as a $10 billion credit union doesn’t make sense,” she said. “As we all know, larger risks have wider consequences. So, we are reorganizing our existing resources to create an Office of National Examinations and Supervision to enhance oversight of the nation’s largest consumer credit unions—those with more than $10 billion in assets—and also assume supervision of corporate credit unions.

According to a Credit Union Times report, the Current Director of Corporate Credit Unions Scott Hunt will lead the new office, and will bring his existing staff with him. The Office of Examination and Insurance, led by Director Larry Fazio, will provide twice-annual “quality control” reviews of the new office’s examinations, she said.

The restructuring holds promise for small credit unions, according to Debie Keesee, President/CEO of Spokane Media and the Northwest’s representative on the Credit Union National Association (CUNA) Small Credit Union Committee.

“The CUNA Small Credit Union Committee has worked diligently with the NCUA to have them recognize that small credit unions pose very little risk to the share insurance fund, even when taken as a whole. Therefore spending two weeks examining a credit union of my size simply makes no sense from a resource perspective,” said Keesee. “This is a great step on behalf of the NCUA acknowledging the reality of small credit union’s risk, and will be welcome by all small credit unions.”  

Troy Stang, President of the Northwest Credit Union Association, noted the value of the dual charter system with the state regulators taking the lead on regulation and the NCUA protecting the insurance fund.  He expressed some concern.

“If the NCUA is placing more resources around examining larger institutions, will they get better at partnering with the state regulators?  I hope they will value the dual charter system as we do, and have regard for the state charter, not adding to the regulatory burden for large well managed credit unions.” Stang noted.

According to a press release, the NCUA currently spends 45 percent of examination hours on credit unions with less than $50 million in assets, yet this group holds only seven percent of overall industry assets. Meanwhile, the largest credit unions—those with more than $1 billion in assets—hold 47 percent of industry assets and receive only 10 percent of examination hours.

To address this imbalance, NCUA says it will concentrate more hours and more attention where more of the industry’s risk is held. The reallocation of examiner resources from smaller credit unions to the largest ones means examiners will spend less time in well-performing small credit unions.

“Fewer and fewer credit unions are holding more and more total assets,” added Matz. “The new office will be dedicated to the challenges of supervising the largest credit unions, promoting consistency of exam practices. In addition, this office will leverage national and regional expertise to promote high-quality evaluations of risk and risk management practices. This is not about keeping credit unions from getting too big to fail; it’s about keeping them from failing.”

The Office of National Examinations and Supervision will open its doors Jan. 1, 2013.

For the full text of Matz’s speech before the National Association of Federal Credit Unions, go to


Questions or Concerns? Contact Matt Halvorson, Anthem Editor:

Posted in Compliance News, Compliance News, NCUA.