NCUA’s Call Report Modernization Would Reduce Reporting Burdens

At the January NCUA Board meeting, the NCUA unveiled a series of changes to its Call Reports for public comment. The changes are aimed at striking a balance between reducing the reporting burden on credit unions and providing the agency with the information it needs for its supervision and data analysis.

“Call Report data is essential to the NCUA’s operations, and reporting is a significant responsibility for credit unions,” NCUA Board Chairman J. Mark McWatters said. “The agency has undertaken a comprehensive review of the Call Report to modernize and increase efficiencies. We hope that credit union stakeholders will review the proposed changes and continue to provide comments on this important and significant project.”

The proposed changes are the result of the NCUA’s modernization efforts that began in 2016 with a request for information that asked stakeholders for their opinions on how the Call Report, Credit Union Profile, and their accompanying instructions could be improved.

A clear takeaway from the comments the NCUA received from this request for information was the need to reduce the size and complexity of the Call Report, reorganize the schedules so items in the report were grouped more logically and with less overlap, and to improve the quality of instructions. We also received feedback on the functionality of the Call Report system.

Following the comment period, our staff analyzed the usage of each account code in the Call Report and surveyed internal users. The modernization team sought to reduce or eliminate information that was no longer needed or where additional levels of detail aren’t necessary to meet the NCUA’s supervisory needs. They also reviewed related regulations, accounting standards, and finance and lending guidance as they related to the changes to the Call Report being considered.

These efforts culminated in a prototype Call Report and Profile that:

  • Reflects a net reduction in total account codes of approximately 40 percent, retiring more than 1,000 account codes and adding a little over 400;
  • Reorganizes the Call Report into separate schedules;
  • Aligns the instructions with changes in the form and includes our rational for collecting each type of data; and
  • Eliminates outdated fields to ensure the data collected is relevant for credit union operations of today.

The NCUA is seeking input on our proposed prototype and the related instructions before we proceed with implementation. We ask credit unions to consider the following questions as they review the proposed changes:

  • Will the prototype reduce the reporting burden?
  • Are any account codes slated for retirement still pertinent?
  • Are the relocated account codes grouped logically?
  • Should any schedules be expanded based on new rules, accounting changes, or to assist in analysis?
  • Are the instructions adequate?
  • How much time will credit unions need to make changes in their systems to adapt to Call Report changes?
  • Are there other operational issues the NCUA should be aware of before we implement the proposed changes?

“While we believe the prototypes are better organized and significantly streamlined, credit unions and their vendors will need time to make changes,” Larry Fazio, Director of the Office of Examination and Insurance, said during the presentation of the prototype. “So, we also want input on how long credit unions believe they will need to get ready for such a change. We will analyze all the feedback, make any warranted revisions, and then develop an implementation timetable and plan.”

The comment period is open until April 2, and all related materials on the Call Report and Credit Union Profile prototypes are posted on the NCUA’s website.

Fazio also noted that the NCUA will have a lot of back-office changes to make for such a comprehensive update to the Call Report, and the agency will need lead time to modify our examination and monitoring systems. Even subtle changes reflected in the prototype will take until March 2019 to implement, and the more sweeping changes proposed will take longer and need to be coordinated with the agency’s Enterprise Solution Modernization project, a multi-year initiative to develop the next generation of NCUA’s examination systems.

Although, the changes reflected in the prototypes will take time to implement, they are a good-faith attempt to update and streamline the NCUA’s Call Report and Profile data collections. Other federal banking agencies are engaged in similar reviews of their data collections that began in 2015 as part of the Financial Services Regulatory Relief Act of 2006. Although, the NCUA is not covered by this act, the agency decided to voluntarily engage in a similar extensive review of its Call Report and Profile data collections to determine what information is no longer relevant and ways it can be enhanced to reduce the reporting burden on credit unions where appropriate.

For more information on the prototypes, go to NCUA’s Call Report Modernization webpage.