NCUA implements pilot program with six state banking regulators

NCUA logoNCUA and six state credit union regulators will launch an alternating examination pilot program for a select group of federally insured, state-chartered credit unions. Notably, New York will not be included in the pilot program, even though all state-chartered credit unions in New York are federally insured.

The six participating state regulators include the California Department of Business Oversight, the Florida Division of Financial Institutions, the New Hampshire Banking Department, the Oklahoma State Banking Department, the South Carolina Office of the Commissioner of Banking and the Texas Credit Union Department.

According to the NCUA, the pilot program will evaluate three alternating examination program approaches:

  • alternating lead – the NCUA and state regulators conduct joint examinations of federally insured, state-chartered credit unions, alternating which agency serves as lead each cycle;
  • alternating with limited participation – the NCUA and state regulators alternate conducting examinations with some involvement from the other agency; and
  • alternating – the NCUA and state regulators alternate conducting examinations independently.

“Credit unions should only have one regulator, not two,” said New York Credit Union Association President/CEO William J. Mellin. “The role of the NCUA during an exam of a state charter should be limited to protecting the insurance fund. The state regulator should be responsible for everything else.”

The pilot program, based on recommendations in the 2016 Exam Flexibility Initiative report, will run for one full alternating cycle, approximately three years. The program is the result of ongoing work by a joint NCUA-state supervisor working group made up of representatives from NCUA, several state regulators and the National Association of State Credit Union Supervisors.

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