ARLINGTON, Va.-Credit unions have been facing longer and more rigorous examinations over the last year, according to a recent NAFCU survey.
In the trade group's May Flash Report, about 77% of surveyed NAFCU members said that NCUA's approach to consumer compliance and risk issues has changed in the last 12 months. CUs reported that NCUA examiners have paid much closer attention to loan quality in first-mortgages, other residential and commercial real estate loans as well as indirect loans.
Other lending products, such as consumer and auto loans, were treated more or less the same, but less than 11% survey respondents indicated that they have not seen any changes in the duration or scope of NCUA examinations in the past year.
"Most credit unions indicated that more documentation was now needed to be prepared for the examination, followed by a longer overall time-frame and longer on-site examination," the report concluded, noting that over 70% of respondents indicated that they have been forced to spend more time on documentation.
NAFCU Director of Regulatory Compliance Anthony Demangone noted a definite uptick in calls to his division and feedback from member credit unions, though most of the questions he's fielded have dealt with the new consumer compliance regulations. NCUA acknowledged a more stringent approach to "prompt resolution" of risks identified during the more beefed up examinations. "The review of our most recent loss cases shows more prompt, definitive resolution action has the potential to reduce losses for the NCUSIF," the regulator's Office of Examination and Insurance told Credit Union Journal. "There is also additional emphasis nationally being placed on ensuring credit unions understand the risk in their credit union and can quantify their decisions."