Speaking to 150 members of the American Association of Credit Union Leagues today in Naples, Fla., NCUA Chairman Debbie Matz said is bolstering supervision in specific areas to help credit unions manage heightened risk.
"Whenever necessary, NCUA examiners will be taking public administrative actions to ensure compliance," she stated. For example, Matz explained, "if a credit union has not addressed NCUA recommendations in a private Document of Resolution, examiners will likely follow up with a public Letter of Understanding and Agreement-or in more severe cases, a public Cease and Desist order."
Examiners are reviewing call reports to look for red flags, such as concentrations of fixed-rate mortgages and increased delinquencies in indirect lending portfolios, member business lending and loan participations.
"We are not doing this to discourage lending," Matz pointed out. "We are doing this to ensure that credit unions lend in a prudent, safe and sound manner. The expectation is that credit unions will comply and minimize the number we have to merge, consolidate or liquidate. Our goal is to detect and resolve problems before they become insurmountable."