NCUA Call Report Fines Double When Contested
The largest maximum civil money penalty a credit union could receive for filing its call report late this past quarter is $106,000, the NCUA said.
Each of the 84 credit unions the NCUA determined did not have a legitimate reason for filing a late 5300 report received a letter with a consent form that contained two figures, the agency said on July 14.
The first dollar amount was the CMP that would have to be paid if the credit union signed a consent form. The second figure–a larger penalty–was the CMP due if the credit union does not sign the consent form and decided to argue its case in court before an administrative law judge.
According to NCUA Director of Examination and Insurance Larry Fazio, the 84 credit unions were also given a third option: “Request reconsideration of the CMP due to an extenuating circumstance.”
The NCUA said the proposed CMP dollar amounts in each letter were based on each credit union's asset size and number of days its call report was late.
NCUA Board Chairman Debbie Matz said the proposed CMP would be cut in half if the credit union signed the consent form.
“The civil money penalties ultimately could be onerous, but if the credit union decides to sign a consent decree, it's really what I consider a minimum amount. Some credit unions are charged a couple hundred dollars,” she said at the NCUA's Chicago Listening Session on July 10.
“We don't get the money. The money goes to Treasury. We’re doing it because we need to do our job,” she added.
The largest maximum CMP included in the letters was $106,000 and the smallest minimum CMP was $150, according to Fazio.
“In between, there are a wide variety of dollar amounts depending on each individual credit union's circumstances,” he said.
A credit union executive asked Matz at the Listening Session if the agency could implement a call report filing grace period for smaller credit unions.
“We don't just automatically access civil money penalties,” Matz said. “First we go to the regions and have them find out if there was an extenuating circumstance.”
Matz said an example of an extenuating circumstance would be a flood or electrical problem.
“So, even though we started with 104 credit unions that filed late, we are actually down to 84 because there were 20 that had reasonable reasons why they couldn't get it in on time,” Matz said.
“As far as the others respective of their size, we need to get the data because if we don't get the data on time, we can't produce our reports on time. And when we can't produce our reports on time, we hear from the other regulators, and we hear from members of Congress. They don't care how big the credit union is. They don't care what our issues are. They want the call reports on time,” she added.
Matz said penalties were a last resort for the agency. She added that the FDIC typically has zero late filers.
“It just seems like we have been too lenient about it and we’re taking the flak for it so this seems to be the only way to get our message through,” she said. “I’m sorry, it does seem harsh, but it's not something we wanted to do. We couldn't figure out any other way to get our point across.”