The NCUA board on Thursday approved a plan to give regionaldirectors more discretion in scheduling exams for federal creditunions and federally insured, state chartered institutions.

Under the plan, exams for federal credit unions do not have tobe conducted every calendar year. However, the time between examsmay not exceed 23 months.

Likewise, for federally insured, state chartered credit unionswith assets exceeding $250 million, exams will not need to beconducted each calendar year. Instead, regional directors maychoose which of those institutions to examine based on severalfactors, including the risk profile of the institution, emergingtrends, the time that has lapsed since the last exam andcoordination with state regulatory agencies.

The changes are effective immediately, but they may be amendedbased on the results of the Exam Flexibility Initiative, whichChairman Rick Metsger announced earlier this year.

The agency is also examining the call report process.

Metsger said the new exam plan eliminates the rigidity of theprevious process as well as the need for examiners to cram examsinto the end of the calendar year.

He said some exams scheduled for the end of 2016 could berescheduled for the beginning of 2017.

The board approved the changes as part of its 2017-2020Strategic Plan. The exam process changes were the only majoralterations made to a draft plan that was released by NCUA earlierthis year.

Credit union officials said they are pleased with thechanges.

“NAFCU and our members appreciate that [the] NCUA board heededour concerns regarding the exam cycle and voted to eliminate astrict annual exam cycle for federal credit unions and eligiblefederally insured, state chartered credit unions as part of its2017-2021 strategic plan,” NAFCU Executive Vice President ofGovernment Affairs and General Counsel Carrie Hunt said.

At the meeting, the board also received an update on its 2016budget. NCUA CFO Rendell Jones said the agency's operating budgetis expected to be about $2.7 million less than the agencyoriginally estimated. However, Jones said since the agency'sOperating Fund is partially based on the cash needs of the agency;he recommended no changes be made.

The board also received a report on the agency's Share InsuranceFund and was told that no new assessments will be needed thisyear.