Behind the Scenes: Who Reviews Your NCUA Exam Before You See It?
As credit union leaders, you are familiar with the examination process. But have you ever wondered what happens to your exam report after the examiners leave and before it lands on your desk? A recent episode of "With Flying Colors" podcast, featuring host Mark Treichel and former NCUA examiners Todd Miller and Steve Farrar, shed light on this often-mysterious process.
The Review Policy
In recent years, NCUA implemented a policy requiring higher-level review of all examination reports before release. This change brings NCUA in line with other financial regulators but has also introduced new complexities to the process.
How the Review Process Works
The extent of review depends on your credit union's size and CAMEL rating:
- Under $50 million and CAMEL 1-3: Supervisor review only (10 business days)
- $50-250 million or CAMEL 4-5: Division of Supervision review (additional 15 days)
- Over $250 million: Associate Regional Director review
- Over $1 billion: Additional reviews, potentially taking up to 55 days total
Impact on Exam Cycles
While the review process is more thorough, it can affect exam timing:
- Well-run credit unions under $1 billion may see 14-20 months between exams
- Most credit unions still face annual exams (8-12 months apart)
- CAMEL 3 ratings trigger follow-ups within 180 days
- CAMEL 4 ratings prompt follow-ups within 120 days
Challenges and Considerations
The new process isn't without its hurdles:
1. Delays: Reports may arrive beyond NCUA's 90-day goal
2. New findings: The review might introduce issues not discussed during fieldwork
3. Lack of transparency: Credit unions often can't track a report's status
What This Means for Your Credit Union
1. Stay in touch: If your report is delayed, maintain contact with your examiner
2. Be prepared for changes: The final report may differ from initial discussions
3. Plan ahead: The extended review process might affect your remediation timelines
The Bottom Line
While the new review process aims to enhance consistency and thoroughness, it can sometimes lead to frustrations with timing and unexpected findings. Understanding this process can help you better navigate your next examination and set realistic expectations for your team.
Remember, open communication with your examination team remains key to a smooth process, regardless of what happens behind the scenes at NCUA.
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