The Federal Credit Union Act authorizes the NCUA Board to oversee America’s credit union system and administer and manage the National Credit Union Share Insurance Fund. The NCUA also has statutory responsibility for supervising compliance with and enforcing laws and regulations that protect all credit union members.
The NCUA’s primary function is to identify and assess credit union system risks, threats, and vulnerabilities; determine the magnitude of such risks and mitigate unacceptable levels of risk through its examination, supervision, and enforcement programs. As such, the NCUA’s examination program focuses on the areas that pose the highest risk to the credit union system and the Share Insurance Fund.
Small Credit Union Examination Program
For most small federal credit unions with less than $50 million in total assets and CAMELS ratings of 1, 2, or 3, the NCUA follows its Small Credit Union Examination Program. This streamlined examination program focuses on the most pertinent areas of risk in these types of institutions. The agency typically provides oversight to small credit unions with a CAMELS rating of 4 or 5 using the risk-focused examination program.
Risk-focused Examination Program
The NCUA’s three regional offices oversee and examine consumer credit unions with less than $15 billion in assets. For larger credit unions with assets less than $15 billion, the agency conducts risk-focused examinations that review areas with the highest potential risks, new products and services, and compliance with federal regulations.
Large Credit Union Examination Program
The NCUA’s Office of National Examinations and Supervision oversees and examines consumer credit unions with $15 billion or more in assets. The large credit union program includes a continuous supervision model, including enhanced offsite monitoring and data analysis. During these examinations, NCUA’s examination staff focus on interest rate risk; evaluate lending and credit practices; and assess information technology, cybersecurity, and payment system risks. In addition, these institutions undergo annual stress tests to assess their capital levels under a series of adverse financial and economic scenarios.
Corporate Credit Union Examination Program
The NCUA also supervises the nation’s corporate credit unions. Each of these institutions acts as a “credit union for credit unions” by providing several critical financial services for consumer credit unions, including payment processing. The NCUA assesses these institutions’ capital levels, interest rate risk, cybersecurity preparedness, and other critical areas.
Consumer Financial Protection and Fair Lending Examination Program
The NCUA also examines credit unions with less than $10 billion dollars in assets for compliance with consumer financial protection and fair lending laws and regulations. Most of the NCUA’s consumer financial protection reviews occur as part of the risk-focused examination program. As part of the NCUA’s fair lending examinations, the NCUA enforces ECOA and Regulation B in federal credit unions and the Home Mortgage Disclosure Act (HMDA) and Regulation C in all federally insured credit unions. The agency also assesses credit union compliance with the Fair Housing Act.
Credit Union Policy Reviews
The NCUA’s exam staff also review credit union policies and bylaws during examinations of federally insured credit unions. A credit union should tailor its policies based on regulatory requirements and the needs of the organization, accounting for internal and external factors, including changes to the credit union’s current and future product and service offerings, complexity, financial condition, field of membership, location, and the economic environment.
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Additional Resources
- Letters to Credit Unions and Other Guidance — This database provides information to the credit union system on regulatory and supervisory matters, trends affecting federally insured credit unions and potential risks and threats.
- CUOnline — This is a web-based program used by credit unions and state supervisory agencies to submit and certify operational and quarterly financial information to the NCUA.
- Examination Modernization Initiatives — The NCUA has several initiatives in process to improve and modernize how the agency conducts examinations and supervision.
- Manuals and Guides — These manuals provide guidance to better comply with the NCUA’s regulations and those from other agencies.
