Answering calls for an improved exam process, NCUA ChairmanDebbie Matz on Tuesday released a letter to credit unions thatdetails the agency's plans to separate Documents of Resolution fromExaminer's Findings and include documented support for DORs.

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Beginning in January 2014, DORs will include a description ofmaterial problems, along with corrective actions agreed upon byexaminers and credit unions.

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The Exam Fairness and Reform Act, reintroduced in the House ofRepresentatives in April, would require examiners to documentreasons for exam exceptions.

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“Ideally, the DOR will include corrective action plans developedcooperatively between examiners and credit union officials forconcerns of the highest priority,” Matz said in the letter, whichis posted onthe NCUA's website.

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Matz also said failure to correct problems documented in the DORwill impact a credit union's CAMEL and risk ratings, and may alsoresult in enforcement actions.

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Examiner's findings will include less urgent problems the creditunion can address in its normal course of business, Matz said.

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“Management may use its own discretion to determine thetimeframe and approach for correcting these problems; however, weexpect management to address concerns documented in the Examiner'sFindings within a reasonable timeframe,” she said.

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Like unresolved DORs, unresolved Examiner's Findings will impactCAMEL and risk ratings, she added.

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The NCUA also revised its National Supervision Policy Manual tomake clear that credit union management should recommend strategiesto solve exam problems. Credit unions have said examiners havedictated how credit unions should resolve exam issues.

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“Reasonable solutions provided by the credit union will becomethe corrective action plan included in the DOR,” Matz wrote in theletter. “Working together to proactively identify problems andreasonable solutions will ensure credit unions continue to servetheir members and operate soundly.”

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Other changes to the exam process detailed in the letter includea requirement for credit unions to contact their NCUA RegionalOffice in writing once credit unions correct activities deemedunsafe or unsound.

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Examiners are also now required to follow up with credit unionofficials on outstanding DOR items within 120 days after thetimeframe for completion has passed.

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