The Federal Credit Union Act authorizes the NCUA Board to oversee America’s credit union system and administer and manage the National Credit Union Share Insurance Fund. The NCUA also has statutory responsibility for supervising compliance with and enforcing laws and regulations that protect all credit union members.
The NCUA’s primary function is to identify and assess credit union system risks, threats, and vulnerabilities; determine the magnitude of such risks and mitigate unacceptable levels of risk through its examination, supervision, and enforcement programs. As such, the NCUA’s examination program focuses on the areas that pose the highest risk to the credit union system and the Share Insurance Fund.
Exam Scheduling Program
The NCUA’s examination scheduling timeframes for the federally insured credit unions (FICUs) with total assets less than $15 billion are reflected in the table below.
| Criteria | Time from Last Exam Completion to Next Exam Start |
|---|---|
1. FICUs with any of the following, except for FISCUs with assets less than $100 million:
| 8 months to less than 12 months |
| 2. FICUs not included in Criteria 1 with assets between $1 billion and $15 billion. | 2b. Net worth ratio between 7% and 10%: 12 months to less than 18 months 2c. Net worth ratio greater than 10%: 12 months to less than 20 months |
| 3. FCUs not included in Criteria 1 or 2. | 14 months to less than 24 months |
| 4. FISCUs not included in Criteria 1 or 2. | When needed as determined by the assigned RD |
The NCUA’s examination scheduling program applies an extended examination cycle to eligible credit unions. Two flowcharts illustrating the eligibility of federal credit unions and federally insured, state-chartered credit unions for an extended examination cycle are available below. Eligibility is also reflected in the table above.
Eligibility of Federal Credit Unions for Extended Exam Cycle
Eligibility of Federally Insured, State-chartered Credit Unions for Extended Exam Cycle
The examination cycle does not limit the NCUA’s authority to examine any FICU as frequently as the agency deems necessary. The NCUA will consider financial trends, risks, and other facts or circumstances to determine if a more frequent examination or supervision contact is required.
Small Credit Union Examination Program
For most small federal credit unions with less than $50 million in total assets and CAMELS ratings of 1, 2, or 3, the NCUA follows its Small Credit Union Examination Program. This streamlined examination program focuses on the most pertinent areas of risk in these types of institutions. The agency typically provides oversight to small credit unions with a CAMELS rating of 4 or 5 using the risk-focused examination program.
Risk-focused Examination Program
For credit unions with more than $50 million in assets, the agency conducts risk-focused examinations that review areas with the highest potential risks, new products and services, and compliance with federal regulations.
Large Credit Union Examination Program
The NCUA’s Office of National Examinations and Supervision oversees and examines consumer credit unions with $15 billion or more in assets. The large credit union program includes a continuous supervision model, including enhanced offsite monitoring and data analysis. During these examinations, NCUA’s examination staff focus on interest rate risk; evaluate lending and credit practices; and assess information technology, cybersecurity, and payment system risks. In addition, these institutions undergo annual stress tests to assess their capital levels under a series of adverse financial and economic scenarios.
Corporate Credit Union Examination Program
The NCUA also supervises the nation’s corporate credit unions. Each of these institutions acts as a “credit union for credit unions” by providing several critical financial services for consumer credit unions, including payment processing. The NCUA assesses these institutions’ capital levels, interest rate risk, cybersecurity preparedness, and other critical areas.
Consumer Financial Protection and Fair Lending Examination Program
The NCUA also examines credit unions with less than $10 billion in assets for compliance with consumer financial protection and fair lending laws and regulations. Most of the NCUA’s consumer financial protection reviews occur as part of the risk-focused examination program. As part of the NCUA’s fair lending examinations, the NCUA enforces ECOA and Regulation B in federal credit unions and the Home Mortgage Disclosure Act (HMDA) and Regulation C in all federally insured credit unions. The agency also assesses credit union compliance with the Fair Housing Act.
Credit Union Policy Reviews
The NCUA’s exam staff also review credit union policies and bylaws during examinations of federally insured credit unions. A credit union should tailor its policies based on regulatory requirements and the needs of the organization, accounting for internal and external factors, including changes to the credit union’s current and future product and service offerings, complexity, financial condition, field of membership, location, and the economic environment.
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Additional Resources
- Letters to Credit Unions and Other Guidance — This database provides information to the credit union system on regulatory and supervisory matters, trends affecting federally insured credit unions and potential risks and threats.
- CUOnline — This is a web-based program used by credit unions and state supervisory agencies to submit and certify operational and quarterly financial information to the NCUA.
- Exam Notification Letter – This is the exam notification letter template examiners will send to credit unions to notify them of upcoming exams.
- Examination Modernization Initiatives — The NCUA has several initiatives in process to improve and modernize how the agency conducts examinations and supervision.
- Manuals and Guides — These manuals provide guidance to better comply with the NCUA’s regulations and those from other agencies.