Office of Examination and Insurance
A DIALOGUE ON THE EXAM PROCESS
Office of Examination
Last month, Chairman Matz
announced a nationwide
series of “Listening Sessions”
that will begin in May. The
goal is to have a dialogue on
how to improve the exam
process and how to
streamline regulations, as
well as to discuss any other
issues on the minds of credit
or when regulatory violations are noted.
To their credit, examiners are passionate about the mission of
credit unions. Thus, they are very dedicated to their role as
frontline guardians of the health of the credit union system.
By and large, examiners fulfill this role with professionalism
As NCUA’s Chief Examiner, I have heard a lot lately about
the exam process, in particular the working relationship
between examiners and credit unions. In the majority of
cases, credit union officials have a good working relationship
with their examiners. Management believes that the examiner
is a valuable resource, and the exam process yields a
beneficial external perspective. In other cases, credit unions
report breakdowns in the process. There will always be
tension inherent in this type of relationship, but the overall
mood seems worse than usual.
Of course, tensions are still high; everyone has worked under
a lot of pressure for a long time. Disagreements, even fervent
ones, on the condition of a credit union and any necessary
remedial actions are to be expected. While financial,
operational, and regulatory matters are important elements of
an examination, the exam process at its core involves the
interaction of human beings. So, this is where we all need to
start listening more.
“In particular, I am very interested in listening to ideas on how examiners
and credit union management can better
understand and recognize the challenges
and demands of their corresponding
roles, and the associated points of view. ”
In particular, I am very interested in listening to ideas on how
examiners and credit union management can better
understand and recognize the challenges and demands of their
corresponding roles, and the associated points of view. I want
to listen to suggestions on best practices NCUA examiners
can use in achieving a results-oriented examination conducted
with professionalism and empathy. When done right, you
might not like the message, but you respect the means by
which the examiner delivered it.
I also hope to hear recommendations for how credit union
management should interact with examiners; they are people,
too. We should discuss how to build a constructive working
relationship and trust. Even though they might have different
perspectives on how best to proceed, a conscientious
management team has the same ultimate interest as the
examiner: the health of the credit union.
Our society has gone through one of the most severe
economic challenges since the Great Depression. The effects
of the recession are still lingering. The crisis also taught us
many lessons. From what we learned, we are now making the
necessary regulatory changes that will produce some
operational challenges for financial institutions.
CONTINUED ON NEXT PAGE
Advice Given During Level 4
New Examiner Training
Credit union management teams have had to cope with these
economic challenges for a prolonged period. It has been
difficult, and management teams still have much work to do.
; Begin in a friendly way.
; Let others do a great deal of the talking.
It has also been hard for examiners. The crisis necessitated
long hours and a lot of time on the road for examiners. Being
an examiner is a tough—and often thankless—job. Examiners
must make difficult judgments about the risk a credit union
represents to the Share Insurance Fund. We hold examiners
accountable for achieving resolution when risk is excessive
; See things from their point of view. Don’t
judge them even if you know they are wrong.
They don’t think so.
; Be sympathetic with other’s ideas and desires.
; Slow down, give time for solutions to gel.