Anticipating Your Next

ExamJune 7, 2013

Matthew J. Biliouris, Director of SupervisionOffice of Examination and Insurance

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Part of an Ongoing Process

Annual Exam

Call ReportReview

Follow-Up

Periodic Phone Calls

Policy Changes

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Before the Exam

• Scheduling the Exam– EIC will call to schedule the examination

• Information and Request Letter– Information on Examination (i.e., Examiner-in-Charge (EIC), start

date, list of participants, etc.)– List of Information Needed for the Examination

• Items Needed for Examination– Be complete– Have the items ready when the examiners arrive– Label the items with corresponding numbers as requested– If you have questions, call the EIC. Don’t wait.

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Day One

• Entrance Meeting– Schedule time to meet with the EIC/Exam Team– Discuss changes since the preceding exam

• Introductions• Working Space– Provide adequate space, privacy, conditions, and

seating for the exam team.

• Set Expectations

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Day One

• Other Helpful Suggestions– Organizational Chart– List of credit union contacts– Management’s schedule– Passcodes or badges– Building map– Power strips, if available– Food recommendations

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Communication

• Try to be open and honest when communicating with your examiner.

• Be responsive to examiner requests.• Be prepared to discuss new products and

services– Advance Strategic Planning– Internal Controls that have been implemented– Ongoing Risk Mitigation Efforts– Board Reporting

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Communication

• Preceding Examination Concerns– Be prepared to discuss the corrective actions

taken in response to the findings at the preceding examination.

• Exit Conference– Open Dialogue– Agreements and Commitments

• Joint Conference– Options for credit unions

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Communication

• Examination Report– Examiners are encouraged to provide the credit union with a draft

copy of the exam report so it can be reviewed before the exit interview.

– The report should be received by the credit union as early as the Exit Conference or the examiner has up to six business days after the Exit Conference to mail the report.

– The report should be read by the Manager/CEO, all Board Members, and the Supervisory committee, regardless of the CAMEL rating.

– Any questions about the content of the report, should be directed to the examiner.

– If you have issues with or disagree with the report:• Contact the examiner or Supervisory Examiner• Instructions on filing an appeal are contained in the cover letter to the

report.

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Following the Exam

• Monitor status update on items needing corrective action

• Inquiry about local or regional economy or news items

• Perform quarterly financial performance analysis

• Respond to inquiries from credit union– Strategic vision– New products or services

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What Should the Supervisory Committee Expect?

• Be prepared to discuss/present information about your periodic reviews & Verification of Member Accounts

• Examiners want to:

– Review work papers

– Ensure your work papers are organized

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What Should the Supervisory Committee Expect? (continued)

• NCUA’s examiner determines if the Supervisory Committee:– Fulfills obligation as an independent watchdog of

the credit union – Ensures an annual audit is made– Ensures a report of that audit gets submitted to

the board of directors – Provides a summary of the report to the members

at the credit union’s next annual meeting

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Annual Audit Schedule

• Create an annual audit schedule identifying:– Review Areas– Frequency of Reviews (Monthly/Quarterly)– What is specifically reviewed ( example: all paid

ahead loans)– Identify Party Responsible for each review area

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Annual Audit Schedule

Sample Audit ScheduleAudit/Review Recommended # of

times per yearWhat to review each time

Follow up on prior audit or examination report

Monthly All Items from the previous audit/exam outstanding

File Maintenance Review Monthly or as often as possible All reports for the month

Review shares under a specified $ amount

2 times per year Randomly select at least 10 days throughout the month other than month end

Paid ahead loan report 2 times per year Loans paid ahead 3 monthsLoans by Interest Rate Report 2 times per year All loans

Dormant Account Report 2 times per year All new dormant accounts on report

Delinquency Review 2 times per year All accounts for the month

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How to Review and Comment on Proposed NCUA Regulations

• NCUA proposes regulations for federally insured credit unions

• NCUA encourages comments on proposed rules because it enhances the rulemaking process

• Officials are encouraged to review and send comments on proposed regulations

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How to Review and Comment on Proposed NCUA Regulations

• The public can visit NCUA.GOV to review regulatory proposals and view other proposed rule comment letters before writing a comment letter

• All proposed rule comments are categorized by content and reviewed internally prior to NCUA drafting final regulations

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How to Review and Comment on Proposed NCUA Regulations

• Tips for commenting on proposed regulations continued:

• Comments should specify unintended consequences to proposed rules

• Comments should propose reasonable alternatives to new rules if proposed rules are burdensome

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Questions??

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Office Contact PageFeel free to contact our office with questions or comments.

Staff: Matthew J. BiliourisDirector of Supervision

Office of Examination & Insurancematthewb@ncua.gov

Amanda ParkhillLoss Risk Analysis Officer

Office of Examination & Insuranceaparkhill@ncua.gov

Maggie MillerProgram OfficerOffice of Examination & Insurancemmiller@ncua.gov