CUNA Regulatory Comment Call


July 27, 2001

Quarterly Call Reports For All Federally Insured Credit Unions

EXECUTIVE SUMMARY

HIGHLIGHTS

As part of the new Risk Based Examination Scheduling Program, the NCUA Board proposes to require all federally- insured credit unions regardless of asset size to file quarterly Financial and Statistical Reports with the agency. The Board believes that quarterly call reporting is a crucial component to facilitate the move to risk focused examinations. The proposed rule will have a 90-day public comment period. If the proposal becomes final, NCUA plans to implement the change for the March 31, 2002 quarterly call report cycle.

Currently, NCUA requires all federally insured credit unions with assets over $50 million to file a quarterly call report with NCUA. All other federally insured credit unions must file semiannually. Some credit unions under $50 million that are currently not required to file quarterly call reports may be eligible for participation in the extended examination cycle program. Requiring those credit unions to file quarterly reports is an essential part of their participation. This proposed rule would require some of the 8,600 or so federally insured credit unions that are below $50 million in assets now filing semiannually to file two additional call reports during each calendar year.

When credit unions comment on the proposal, Chairman Dennis Dollar urges them keep in mind the total impact of the proposed rule. NCUA’s Executive Director Len Skiles says there will be benefits for all federally insured credit unions as well as NCUA.

Some of the benefits for credit unions are expected to be:

NCUA believes that quarterly call reports will result in improvements to its supervision program. Because the quarterly call reports will provide examiner staff with more timely information, examiners will have enhanced ability to detect emerging problems by monitoring the credit unions’ financial trends through the resultant Financial Performance Reports. Further, quarterly monitoring will permit NCUA to make better informed decisions about allocation of its supervision resources. NCUA projects that the quarterly call reporting program could have a net savings of approximately 52,000 hours of examiner time and reduce the risk of losses to the Share Insurance Fund.

NCUA has asked to work with CUNA to consider a simplified form for smaller federally insured credit unions. CUNA will send out a comment call on this quarterly call reporting proposal in the next several days.

QUESTIONS TO CONSIDER

  • Credit unions with assets of over $50 million must file a quarterly call report now. Do you think the requirement for all federally insured credit unions to file a quarterly call report will be burdensome for some smaller credit unions?









  • What steps would you recommend to alleviate the burden on smaller credit unions?









  • Would you favor a 5300 Form EZ in which only an abbreviated schedule would be required for smaller credit unions? If a more complicated form were needed, NCUA could email or fax the schedule to the credit union.









  • In conjunction with the proposal, NCUA has adopted a new policy calling for risk-based scheduling of exams. Click here for CUNA’s RegWatch of July 27 which includes information about the risk-based scheduling. Do you support the risk-based scheduling?









  • Do you agree with NCUA that it cannot move to risk-based exam schedules if it does not have quarterly call report information from all federally insured credit unions?









  • Do you have any other comments you would like CUNA to consider in drafting our comments to NCUA on this proposal?









    Thank you for your assistance in providing comments! Please let us hear from you by mid-October, if possible.

    Eric Richard • General Counsel • (202) 508-6742 • erichard@cuna.com
    Mary Mitchell Dunn • SVP & Associate General Counsel • (202) 508-6736 • mdunn@cuna.com
    Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 • jbloch@cuna.com
    Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 • corr@cuna.com