NCUA Launches Special Exam Team

NET to Guide Troubled Credit Unions During Tough Economic Times Linda McGlasson • January 13, 2009

In response to the economic downturn, the National Credit Union Administration (NCUA) last week activated its National Examination Team (NET) to help supervise and advise federal credit unions in areas where economic conditions have adversely affected them.

The team is part of the 2009 budget increase approved by the NCUA Board last November, introducing a 12-month examination cycle that adds 56 positions, 50 of which are full-time examiners. In approving the increase, the board called for the creation of a national examination team to address "challenging cases" posing the most risk to the National Credit Union Share Insurance Fund.

In 2008, 15 credit unions were either closed, liquidated or merged by regulators.

The NCUA says the decision to launch NET was spurred by the difficulties caused by declining home values, high mortgage delinquency rate, high foreclosure rates, high unemployment rates and concentrations of real estate loans that affected credit unions. Where those factors are found, the agency will deploy a specialized team of examiners to concentrate on the more difficult cases, the NCUA says.

NCUA's plans to activate NET were first decided in the October 2009 budget discussions. The knowledge, skill and experience of NET members will help the team quickly identify complex problems, recommend appropriate actions and improve the quality of NCUA supervision during these tough economic times, says the NCUA. The NET is a part of NCUA's focus on strong and proactive regulation, and shows the priority the NCUA places on safety and soundness.

The NET will supervise assigned credit unions until problems are resolved, either returning the credit union to regional supervision or activating merger, conservatorship or closure.

It also will be responsible for examining and supervising approximately 10 credit unions, mainly large and more complex institutions. The NET also represents an opportunity to expose NCUA examiners to a broad range of credit unions and varying levels of risk, thereby augmenting NCUA's succession planning objectives. The NET consists of a director, five problem case officers (PCOs) and the equivalent of one loss risk analysis officer (LRAO). In addition, regional subject matter examiners (SMEs) will be detailed to NET on an as needed basis, the agency says.