Feds, States Eye How Credit Unions Are Run
It’s not just about your assets.
While the NCUA and state regulators certainly care about the raw numbers of credit unions, they are putting more emphasis on scrutinizing how credit unions are run. In other words, the "M" in CAMEL is getting the spotlight.
Hinkel also said many management problems–and subsequent concerns by examiners–could be prevented if credit unions made more effective use of committees that oversee key parts of their operations, such as technology and lending practices. These panels should have standard agendas that cover the full range of the institution’s activities under their purview, he advised.
The NCUA and some state regulators have issued guidance on performing due diligence.
Some of the agency’s initiatives aimed at improving the quality of those decisions haven’t been met with resounding enthusiasm.
Under a rule approved by the NCUA board in December, within six months of joining an FCU’s board, volunteers would have to develop a level of financial proficiency, which includes basic finance and accounting proficiency. This training can be done by credit union employees, outside sources or, in the case of small credit unions, the NCUA’s Office of Small Credit Union Initiatives.