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Examination & Supervision 2012 Update Chairman's Statements on Supervision “NCUA will not sacrifice safety and soundness as we work to help the credit.

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Presentation on theme: "Examination & Supervision 2012 Update Chairman's Statements on Supervision “NCUA will not sacrifice safety and soundness as we work to help the credit."— Presentation transcript:


2 Examination & Supervision 2012 Update

3 Chairman's Statements on Supervision “NCUA will not sacrifice safety and soundness as we work to help the credit union industry recover in the coming years.” January 2011 “NCUA will remain focused on due diligence and risk management…NCUA will continue to encourage responsible lending.” January 2012

4 What is Safety and Soundness? Management and Officials Understand Risks Accurate and Timely Financial Data Sound Internal Controls / Effective Audits Active Supervisory Committee Efficient Operations / Operating Expense Controls Written Policies that Reflect Actual Practices Realistic Budget and Strategic Plan Communication and Transparency

5 Today’s Topics National Supervision Policy Manual Examination Questionnaires Credit Union Online (NCUA 5300) NCUA Assessments Fraud Risk Indicators in Credit Unions


7 National Supervision Policy Manual Two years in development Collaborative effort by NCUA staff at all levels, all Regions Thorough internal review and comment process Provides for uniform supervision of CU’s nationwide Includes more rigorous follow-up process 6

8 National Supervision Policy Manual Implementation Timeline Field use began January 2012 Examiner training - pilot  January through June 2012 Agency-wide policy  Mid-year 2012

9 National Supervision Policy Manual Table of Contents District Management FCU Program and Procedures FISCU Program and Procedures Quality Assurance Program Audits Recordkeeping Fraud Waivers Other Regulatory Actions Credit Union Service Organizations Small Credit Union Program Bank Secrecy Act Enforcement Prompt Corrective Action Administrative Remedies

10 2012 Examination Scope Minimum Review Requirements

11 2012 Examination Scope Required Questionnaires


13 Examination Questionnaires

14 AIRES  Automated Integrated Regulatory Examination System All AIRES Questionnaires are posted on NCUA web site 13

15 Examination Questionnaires (full screen shot of web page) 14

16 Examination Questionnaires Demonstration 15


18 CU Online – Version 2 Silverlight must be installed to access CU Online Website to install: Started/Install/Default.aspx Started/Install/Default.aspx System Requirements  Windows Operating System: Windows 7, Windows Vista; Windows XP Service Pack 3 Intel® Pentium® III 450MHz or faster processor (or equivalent) 128MB of RAM  Mac OS Operating System: Apple Mac OS X 10.4.8 or above Intel Core™ Duo 1.83GHz or faster processor 128MB of RAM

19 CU Online – Version 2 User Interface updated Security improvements View only screens display all checkboxes Programs/Services categorized like the paper form New Version Current Version

20 CU Online – Version 2 Profile Certification  Required quarterly to submit Call Report  Certify Profile button appears anytime changes are made, and when quarterly certification is due  Users can make several changes to the profile and then certify Must certify to permanently save all changes to the NCUA Changes will be lost if the user logs off or leaves the profile area without certifying

21 CU Online – Version 2 Warnings in the Profile – Implemented to help improve data integrity – Warnings must be commented on prior to certification (similar to call report process) – Will not prevent profile certification

22 CU Online – Version 2 Profile Snapshot taken each quarter when the Call Report is submitted – Permanent record of the profile for the quarter – Ability to print as a PDF

23 CU Online – Version 2 Eliminated edit and delete functionality on Regulatory and IS&T pages – Can only add a date – Sections impacted: financial statement audit, member account verification, annual meeting, disaster recovery test, and data processing conversion.

24 CU Online – Version 2 Current Version – CU OnlineVersion 2 – CU Online Profile Changes: Inability to print profile easilyProfile PDF on demand Merger Partner Registry on General TabMPR on its own tab Part 748 Certification on General TabPart 748 on Regulatory Tab Call Report Changes: Must click “Save” for calculations and edits to refresh Refresh during data entry December 1990 – June 2009- no profile fields on forms All forms display profile fields No easy way to print warningsAbility to export to PDF or Microsoft Excel

25 CU Online – Version 2 Request FPR button moved – Used to obtain a 20 page FPR on a submitted or validated Call Report Current Version New Version

26 CU Online – Version 2 Warnings: Compares Call Report and Credit Union Profile – Warnings identify potential reporting errors – Displayed in the Call Report – Do not backdate the profile to match call report cycle date to remove the warnings Profile should always reflect current operations

27 CU Online – Version 2 Added a CU Basic role – View only permissions for your credit union – Requested by CUs so they could give their Board Members access to CU Online – Optional for credit unions

28 More Information to Come… NCUA will host a webcast for credit unions to provide more information prior to system upgrades Email notification of Webcast – CU Online Administrators and Users – Call Report Contact – Profile Information Contact – Organizational email of the Credit Union (IST page of profile)


30 Assessments - Perception

31 Assessments - Perspective "The amount of the assessments for the national share insurance fund really depends on the industry's own performance." NCUA Chairman Debbie Matz

32 Troubled CU Shares to Total Insured Shares 2006 – 2011 31

33 Credit Union Failures 2002 - 2011

34 Assessments - Future

35 Fraud Credit Unions are experiencing higher losses due to fraud Do you have a Fraud and Ethics Policy?

36 Fraud Failure Statistics 2004 - 2010 13 Fraud Related Credit Union Failures

37 Fraud Losses – Common Traits

38 NCUA Red Flag Questionnaire 37


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