Credit union regulator outlines approach to exams, supervision during coronavirus crisis

Attention to credit unions experiencing problems, discussion with all supervised institutions, and continuation of offsite examinations are the three actions the federal credit union regulator is citing as priorities in confronting the coronavirus crisis, the agency said Monday.

In a letter to credit unions (LTCU 20-CU-05), the National Credit Union Administration (NCUA) also said all agency examinations will take place off-site through May 1. The agency’s offsite policy for all of its employees and contractors, imposed as of March 16, will “remain in effect until further notice, NCUA said. “We will reevaluate this approach through the duration of the COVID-19 pandemic and will notify credit unions of any changes to the procedures described herein,” the agency stated in its letter.

The letter states that the agency’s top priority is safety of agency staff, credit union employees, and credit union members. NCUA said it would “limit the burden imposed on credit unions so that they can focus on providing uninterrupted service to their members.”

The three priorities listed in the letter, the agency noted, outline its approach to examination and supervision for the duration of the COVID-19 pandemic.

In prioritizing attention to federally insured credit unions experiencing problems, the agency said that would be focused on institutions having “significant financial or operational problems in our supervision efforts.” That includes credit unions that have asked for assistance and those that the agency determines may need assistance based on financial and operational conditions. “Examiners will work with credit unions to identify what assistance is needed,” the agency said.

The agency said it would contact each supervised credit union to discuss its operational and financial status, including any challenges or need for assistance. Outreach was scheduled to begin Monday and run through April 10; that period would serve as the “baseline for monitoring each credit union’s condition,” NCUA said.

In conducting exams offsite, NCUA said, examiners will not require a credit union to provide information to conduct offsite examination work – unless approved by the agency’s office of executive director. Further, the agency stated, if a credit union is occupied with addressing the impact of the coronavirus crisis on its operations, workers or members, the credit union “should not be required to address an offsite examination request unless it is a serious or time-sensitive matter.” However, the agency said, when a credit union is able to provide examination documents and make staff available, NCUA examiners will continue to conduct offsite examination work.

The letter also outlines procedures for how NCUA plans to conduct exams during the coronavirus crisis.

“Consistent with long standing practices, examiners will consider the extraordinary circumstances credit unions are facing when reviewing a credit union’s financial and operational condition over the coming months,” the letter states.

NCUA LTCU 20-CU-05: Offsite Examination and Supervision Approach