Hopes that NCUA Chairman Debbie Matz' final regulatory relief initiative would be a return to an 18-month exam cycle were dashed Thursday in a letter to Congress.

Responding to Rep. Frank Guinta (R-N.H.), Matz said the earliest credit unions would see exam cycle reg relief would be the end of 2017. The chairman, who announced Wednesday she would leave the board effective April 30, said the agency must first adjust to regulatory improvements and build out systems and processes to support them.

“Given that the agency's 2016 exam cycle and budget are already in place, there is a limited amount of organizational capacity to make such changes at this time. The agency already has put in motion many initiatives that would improve the examination process, which will take time and resources to complete and that would be the critical aspects of the foundation upon which the NCUA board might consider extending the examination cycle,” Matz wrote in the letter.

The extended cycle might run longer shorter than 18 months, she continued, depending upon the new systems' effectiveness, and safety and soundness.

“These new processes and procedures are scheduled to be in place by the end of 2017. At that time, the NCUA board will be in a better position to consider a comprehensive, well-integrated plan for an extended examination cycle that complies with the recommendations previously made by the U.S. Governmental Accountability Office and the NCUA's Office of Inspector General,” Matz wrote.

In the meantime, Matz concluded, the NCUA will continue implementing its streamlined exam program for healthy credit unions with fewer than $30 million in assets and giving discretion to field staff to apply similar exams for credit unions with $30 million to $50 million in assets with CAMEL ratings of 3 or better.

“Credit unions that are well-run and well-managed deserve and need the relief that shortened exams provide,” NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt said in a release that responded to the letter. “Two years is too long to wait for this relief. While we appreciate Chairman Matz's desire to prioritize modernization efforts, we believe a shortened exam cycle can be implemented in tandem with those efforts. NAFCU will continue to strongly advocate for this change.”

When Matz leaves the NCUA board in April, Vice Chairman Rick Metsger will not automatically take the chairman's position. That designation must come from the president, according to NCUA Public Affairs Specialist John Fairbanks, who cited the Federal Credit Union Act.

Instant Insights /

No 18-Month Exam Cycle Until Late 2017: Matz

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