NCUA finalizes formal appeals framework
At Thursday’s Board meeting, the NCUA quickly finalized regulations which will give credit unions a much more structured and formal process for challenging supervisory determinations with which they disagree. The new regulations begin in January 2018.
Judging by the lack luster response to this proposal—NCUA only received nine comment letters—this new regulation hasn’t sparked all that much interest in credit union land. I don’t know why. For as long as I have worked in the industry, I have heard complaints about how difficult it is to challenge examiner determinations. This new process has the potential of giving credit unions, and examiners for that matter, a fair and dispassionate way of resolving disputes. It also has the potential of providing a body of written decisions that all credit unions could use to help guide their interpretation of regulations.
The list of material determinations for which appeals can be taken includes: (1) a composite examination rating of 3, 4 or 5; (2) a determination relating to the adequacy of loan loss reserve provisions; (3) the classification of loans and other assets that are significant to an insured credit union; (4) a determination regarding an insured credit union’s compliance with federal consumer financial law; (5) a determination on a waiver request or an application for additional authority where independent appeal procedures have not been specified in other NCUA regulations; and (6) a determination by the relevant reviewing authority that an appeal filed under this subchapter does not raise a material supervisory determination.continue reading »