CHICAGO — The NCUA will release new supervisory letters by early 2010 that will address earnings, concentration risk and member business lending.
John Kutchey, deputy director of the NCUA's Office of Examination and Insurance, told his AICPA National Conference for Credit Unions keynote audience here this morning that he will instruct examiners to give credit unions some flexibility when it comes to evaluating revenue.
"The credit union might be unprofitable now, but examiners should look at the credit union's strategic plan, its ability to plan for future, and other factors when rating earnings and income," he said.
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The NCUA is continuing to increase its ranks, hiring more employees to send into the field, and also reallocating more internal staff to "problem resolution" teams within Kutchey's exam and insurance division, he said.
As of Sept. 30, 326 federal insured credit unions had a CAMEL 4 or 5 rating, and 66 of those have more than $100 million in assets. Kutchey said he doesn't expect the number of troubled credit unions to peak until next year, and said losses will lag behind economic recovery.
"There's always about a four to five year tail to work losses through the system after a recession ends," he said.
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