Late call report filers could be fined up to $1 million per day April 25 by the NCUA, according to a new letter to credit unions posted Thursday on the regulator’s website.
The letter from Chairman Debbie Matz said that figure is a worst case scenario, but illustrates the agency is serious about cracking down on late filers. Matz said in the letter more than 1,000 federally insured credit unions of all sizes filed call reports late for third quarter 2013.
And, the problem isn’t new. A large percentage of late filers were chronically late, she said, repeatedly filing after each quarterly deadline throughout the year.
“Such late filing impacts NCUA’s ability to conduct effective off-site supervision and delays the release of quarterly industry data to the general public,” Matz said in the letter. “It is also a drain on NCUA resources, as field examiners are required to follow-up with tardy FICUs.”
The NCUA will begin to exercise its authority to impose civil money penalties against federally insured credit unions that miss call report filing deadlines, the letter said. However, the NCUA has moved back its deadlines to the fourth Friday of each month following the end of a quarter, which the regulator says will give credit unions more time to comply. Credit unions that miss the Jan. 24 deadline will be given warnings, but fines will be assessed if the April 25 deadline is missed.
According to the letter, Section 202 of the Federal Credit Union Act sets specific dollar ranges for civil money penalties as follows:
1. Up to a maximum of $2,000 per day may be assessed for each day a required report is minimally late or contains uncorrected false/misleading information if the late or false/misleading filing is unintentional and the credit union has reasonable procedures in place to avoid such errors.
2. Up to a maximum of $20,000 per day may be assessed for each day a required report is late or contains false/misleading information if the late or false/misleading filing is not covered by the unintentional safe harbor outlined in number one above.
3. Up to a maximum of $1 million (or 1% of total assets, whichever is less) per day may be assessed if a credit union knowingly or with reckless disregard for accuracy submits a false or misleading report and fails to correct it.
Matz also said the NCUA will release the names credit unions assessed with civil money penalties.
Fines will be sent to the U.S. Treasury, and won’t be retained for NCUA use, she said.