Federally chartered credit unions with fewer than $10 million inassets and a CAMEL rating of three or better can expect shorterannual exams and streamlined exam reports, thanks to the NCUA'sSmall Credit Union Examination Program.

The federal regulator outlined the SCUEP program in a recentletter to credit unions, which can be found on the NCUA'swebsite.

“As part of the SCUEP, the agency is allocating only 40 hoursper well managed credit union. This relieved burden reflects areduced scope aimed at focusing on the most pertinent areas of riskin small credit unions – lending, recordkeeping, internal auditfunctions, etc.,” said Chairman Debbie Matz in the letter.

The program is a first step in the agency's efforts to moreclosely align its resources with risks, Matz said.

“Rather than a one-size-fits-all examination program, we areallocating our resources appropriate to the risk posed by eachcredit union to the National Credit Union Share Insurance Fund,” he r lettersaid.

“Credit unions eligible for the SCUEP will continue to receiveprofessional and thorough examinations that focus on areas ofweakness, adverse trends or higher risks. NCUA believes therisk-focused SCUEP, coupled with training and assistance fromOSCUI, will result in improved small credit union operations and abetter allocation of agency resources,” she said in the letter.

Credit unions receiving a SCUEP examination will continue to seeexamination time commensurate with credit union size, structure,and risk profile; emphasis on improved communication withmanagement; focus on issues and risks relevant to the credit union;optional meetings with the board of directors for qualifying creditunions; customized examination reports; and additional supervisionwhere appropriate, the agency said.

Examiners will still closely review areas exhibiting weaknessesand adverse trends, the NCUA said. Also, the scope of SCUEPexaminations will continue to reflect the challenges unique to small credit unions, like fewer staff,limited segregation of duties and internal controls, and scarcefinancial resources to secure necessary equipment, education andtraining.

One thing examiners won't be doing is providing guidance andassistance to small credit unions. That will now be provided by theOffice of Small Credit Union Initiatives, the letter said.

OSCUI's goal is to ensure the long-term viability and growth forsmall credit unions through four primary functions: training,consulting, grants and loans, and partnerships and resources.

Enrollment in OSCUI's National Small Credit Union ExaminationProgram is available through the credit union's NCUA districtexaminer.

Matz said the NCUA will implement the program throughout 2012and evaluate its benefits and longer-term outlook early nextyear.