NCUA’s 2019 performance plan includes exam pilot with 6 states

The 2019 plan for achieving the National Credit Union Administration’s (NCUA) mission and strategic goals around examination and supervision, regulation, and technology was approved on a vote of 2-0 Thursday during the open meeting of the NCUA Board.

The performance plan provides three “priority” goals and sets strategic objectives and success indicators for each. One of the many activities slated this year is an exam pilot program with a handful of state regulators.

For example, under Goal 1 – Fully and efficiently execute the requirements of the agency’s examination and supervision program – the plan includes as strategic objectives maintaining a strong National Credit Union Share Insurance Fund (NCUSIF) and providing high-quality and efficient supervision. Part of keeping a strong NCUSIF is effectively managing fund losses, and one of the indicators of success, as stated in the plan, is maintaining a fund equity ratio (the ratio of fund equity to insured credit union shares) between 1.3% and the fund’s normal operating level, which was set at 1.38% in December.

Additionally, NCUA says that it and six state regulators will pilot an alternating-year examination program for federally insured, state-chartered credit unions (FISCUs) this year. “The pilot program, based on recommendations in the 2016 Exam Flexibility Initiative Report, will run for one full alternating cycle, approximately three years,” it says. The agency says this pilot will help the agencies learn how an alternating exam program “could improve coordination and make the best use of federal and state resources.”

The agency will also seek to evaluate cybersecurity risk in all federally insured credit unions (FICUs) with assets exceeding $250 million using the Automated Cybersecurity Examination Toolbox (ACET) by Dec. 31, 2023. This year, it is working to complete cyber reviews in all FICUs greater than $1 billion and 38% of FICUs with assets between $250 million and $1 billion, the plan shows.

The 2019 performance plan was developed simultaneously with the 2019-2020 operating budget, the agency notes. Budgetary requirements by strategic goal as well as for the Office of Inspector General (OIG) – showing budget dollars and staff devoted to each – are shown in Appendix A to the plan.

Briefly, Goal 1 on supervision and examination is allocated 66.9% of the agency’s budget dollars and 79.3% of projected full-time equivalents (staff); Goal 2 on regulation (focusing on transparency, targeted regulation and associated relief) is allocated 9.4% of budget dollars and 9.8% of FTEs; and Goal 3, on technology (secure, innovative) is allocated 22.5% of budget dollars and 10% of FTEs. The OIG is allocated 1.2% of budget dollars and 0.9% of FTEs, it shows.

The agency’s OIG has also published its 2019 annual performance plan, aimed at responding to issues important to NCUA.

2019 NCUA Annual Performance Plan

2016 Exam Flexibility Initiative Report

RR: NCUA OIG sets 2019 plan, will include material loss reviews ‘as necessary’ (Jan. 15, 2019)