DES MOINES, Iowa – Jim Forney, superintendent of credit unions for the Iowa Credit Union Division remembers a time “not too fondly ago” when monitoring Iowa’s state-chartered credit unions meant manually tracking the CUs through their semi-annually filed paper call reports to the division and looking to see if there were any problem areas. “It was a very labor intensive and inefficient process,” recalled Forney. The division began reinventing its examination and supervision processes five years ago, and the reinvention has been an on-going exercise that’s still continuing. In 1997, the Iowa Credit Union Division put itself through a strategic planning exercise because, said Forney, “We needed to change. We weren’t modernized or timely.” Symptomatic of the division’s inefficiency was its basis for determining when to examine a credit union. Forney said the primary driving force was a credit union’s CAMEL rating and the second driving force was how long it had been since the CU’s last examination. Forney admits there was some subjectivity. In addition, he said, a credit union could expect at that time to receive its examination report from the division 30-35 days after the exam. “It wasn’t timely to say the least,” said Forney. The first visible result of the division’s technology reinvention was its development of a menu-driven, Web-based system that evaluates credit unions’ call reports. Call reports are now sent to the division quarterly instead of semi-annually, and 90% of them are sent electronically. Information in the call reports is run through a series of reviews on the system, and the system in turn generates special interest items for each credit union such as whether the CU has introduced a particular new product or service. “We want to be sure they have the proper policies and procedures in place to offer the new product or service,” said Forney. Examinations are still done on-site, but their frequency depends on the conduct and risk of each credit union. Exams can go out to every 18 months or, if necessary, to as often as every nine months. “That’s one of the nice things about the Web-based system, it gives us the information we need to determine which credit unions need more of our attention,” said Forney. In addition, instead of taking a month or longer to issue its exam report, the Credit Union Division now issues two reports. A complete management report that includes a review of a CU’s operations and any regulatory concerns the division may have, is left with the credit union when the exam is completed. “We walk away with the report in their hands,” said Forney. A narrative-style second report-a board report-is done in “risk-focused format” and is delivered to a CU’s board four to six days after the examiner leaves the credit union. The new examination procedure is not only shorter and is shaving off the amount of time an examiner has to spend at a CU, it’s also reduced their traveling time. Forney said the system has helped eliminate about 20-25% of examiners’ previous travel time. In addition, the division is doing 20-25% of the exam and review process off-site. Forney said he’s aiming for 30%. Despite reaching these enviable goals with its Web-based system, Forney also has his site set on further refinements for the system. For example, the division is currently working on a process that will let it generate whatever kinds of records and reports it may want to see – for example, for an individual credit union, credit unions in a particular area of the state, or all CUs in the state. The Iowa Credit Union Division is also working on a way to allow SCCUs to download their completed call reports on to the system, and on integrating NCUA’s examination scope workbook in to its scheduling process. The Iowa Credit Union Division has 12 examiners that are responsible for examining 180 state-chartered credit unions. -

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