Trades to Urge Lawmakers to Revamp Exam Process
Under the current examination process, the NCUA’s decisions aren’t reviewed by third parties and credit unions don’t receive consistent messages about what the agency looking for.
- N.C. Congressman Charges NCUA in 'Witch Hunt'
- NCUA's Marquis Throws Cold Water on Exam Process Change Idea
Those are among the messages that JetStream FCU President/CEO Jeanne Kucey and West Virginia Credit Union League President/CEO Kenneth Watts plan to deliver to lawmakers at today’s hearing about a measure to revamp the examination process.
NCUA Executive Director David Marquis is also scheduled to testify on the measure, but his testimony hasn’t been released yet.
In her prepared testimony, Kucey notes that under the current system the NCUA “serves as the prosecutor, judge and jury,’’ and there is an absence of reviews by independent third parties. She is testifying on behalf on behalf of NAFCU and is on the association’s board.
Kucey, whose Miami Lakes, Fla.-based credit union has assets of $126 million, said the current examination process is “by its very nature, can be inconsistent.’’
She added that the standards by which credit unions are evaluated shouldn’t change from examination to examination.
Kucey and Watts will be testifying before the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit. The panel’s chairman, Rep. Shelley Moore Capito (R-W.Va.) and ranking Democrat Rep. Carolyn Maloney (D-N.Y.) are the lead sponsors of the measure.
Under the bill, a financial institution that is unhappy with the results of its examination would have the right to appeal it to an administrative law judge who would submit his or her findings to the ombudsman of the Federal Financial Institutions Examination Council (FFIEC), which is made up of representatives of federal and state regulatory entities. NCUA Chairman Debbie Matz is the council’s current chairman.
In Watts’ prepared testimony, he said the bill is needed because often examinations are “based on policy guidance and examiners’ views of best practices rather than regulation and the law.’’
He added that credit unions “have the right to manage risk without being directed by examiners to eliminate it.’’
Watts, who is testifying on behalf of CUNA, noted that a survey by the trade association found that 20% of credit unions were dissatisfied with their most recent examinations.