Credit Union Exam Solutions Presents With Flying Colors
The Harsh Realities of a CAMEL Code 4 Downgrade
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/ Episode Summary: In this episode of With Flying Colors, host Mark Treichel is joined by Steve Farrar and Todd Miller from Credit Union Exam Solutions to discuss the serious implications of a CAMEL Code 4 rating. A downgrade to CAMEL 4 signals significant risk and increased regulatory scrutiny. What does this mean for your credit union? What immediate actions should management and the board take? How does this impact borrowing, liquidity, and operations? Get expert insights into navigating the challenges of CAMEL 4 and what steps to take to get back on track. What You’ll Learn in This Episode: ✅ What is a CAMEL Code 4? Understanding why it’s a major red flag ✅ How NCUA views CAMEL 4 credit unions and why they ramp up oversight ✅ The consequences of a downgrade – more frequent exams, lost privileges, and reputational risk ✅ NCUA’s administrative actions – what happens when you receive a Letter of Understanding & Agreement (LUA) ✅ How a CAMEL 4 affects your liquidity – Federal Reserve & Federal Home Loan Bank implications ✅ The impact on borrowing & collateral requirements ✅ The role of the board in a CAMEL 4 credit union – what’s expected of leadership ✅ Can a CAMEL 4 credit union recover? Strategies for improvement Key Takeaways: 🔹 CAMEL 4 credit unions face exams every 120 days, meaning examiners are always present 🔹 Expect Letters of Understanding & Agreements (LUAs) and preliminary warning letters 🔹 NCUA and federal agencies (like the Federal Reserve & FHLB) are notified, impacting borrowing & liquidity 🔹 The board and management face increased accountability, with NCUA requiring approval for senior leadership changes 🔹 A downgrade to CAMEL 4 means administrative oversight, and in some cases, public disclosure (depending on state regulations) 🔹 Credit unions in this category must act quickly to stabilize finances and demonstrate improvement to avoid further decline Resources Mentioned: 📌 NCUA’s National Supervision Policy Manual (for details on CAMEL 4 oversight) 📌 NCUA’s Share Insurance Briefing (for trends in CAMEL ratings) 📌 Credit Union Exam Solutions – Expert consulting for navigating NCUA exams Connect With Us: 🌐 Visit marktreichel.com for expert guidance on NCUA exams 📩 Have a question or topic suggestion? Email us at [your email/contact info] 📲 Follow us on LinkedIn, Twitter, or Facebook for more credit union insights
Year End Industry Data and Credit Union Trends: A Deep Dive with Todd Miller and Steve Farrar
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/In this episode of With Flying Colors, host Mark Treichel is joined by Steve Farrar and Todd Miller to analyze the latest trends shaping the credit union industry in 2024. They dive into the recently released NCUA data, discussing multi-year trends, economic pressures, and how credit unions are navigating challenges such as rising delinquencies, declining net income, and shifting liquidity conditions.Key Topics Covered:✅ Multi-Year Credit Union Trends – How decisions made during COVID-19 continue to impact the industry today ✅ Rising Credit Risk & Loan Performance – What’s driving the surge in credit card and auto loan delinquencies? ✅ NCUA’s Supervisory Priorities – Where examiners are focusing their attention in 2024 ✅ Liquidity & Interest Rate Risk – How credit unions are adjusting to changing market conditions ✅ Earnings & Profitability Pressures – Understanding the impact of fee income declines, provision for loan losses, and economic uncertainty ✅ Regulatory Challenges & Mergers – The latest data on credit union consolidations and how they compare to community banksRecent Exam Trends:🔹 Increased scrutiny on commercial lending programs and credit concentration limits 🔹 More emphasis on profitability analysis at the loan program level 🔹 Examiners pushing for stronger liquidity contingency funding plans 🔹 Greater focus on enterprise risk management in larger credit unions🎧 Listen now to get the full breakdown of the latest trends and how they could impact your credit union’s operations.Resources & Related Episodes:📌 Want to learn more about specific regulatory issues? Check out our past episodes on: 🔹 Commercial Lending Risks & Best Practices 🔹 Managing Interest Rate & Liquidity Risk 🔹 Navigating NCUA’s Supervisory Priorities🔗 Subscribe to With Flying Colors for the latest insights into credit union regulations and strategy!
The Road to Recovery: Managing a CAMELS 3 Rating
So You're a CAMEL Code 3 – Now What? 🎙 Episode Title: So You’re a CAMEL Code 3 – Now What? Episode Summary: In this episode of With Flying Colors, host Mark Treichel is joined by Steve Farrar and Todd Miller from Credit Union Exam Solutions to discuss what happens when a credit union is downgraded to a CAMEL Code 3. They break down the implications of this rating, what it means for credit union management, and how to navigate increased NCUA supervision effectively. What You’ll Learn in This Episode: ✅ What is a CAMEL Code 3? Understanding the rating and why it matters ✅ How NCUA views CAMEL 3 credit unions and what it means for supervision ✅ The impact of a CAMEL 3 downgrade on credit union operations and oversight ✅ What to expect during follow-up exams and how often NCUA will visit ✅ Documents of Resolution (DORs): What they are and how to handle them ✅ Regional Director Letters (RDLs): Why you might receive one and how to respond ✅ State vs. Federal Charters: Differences in how NCUA approaches CAMEL 3 credit unions ✅ The path back to a better rating: Steps credit unions can take to return to a CAMEL 2 Key Takeaways: 🔹 Credit unions rated CAMEL 3 face increased supervision, typically two visits per year 🔹 Documents of Resolution (DORs) set deadlines for corrective actions, often tied to follow-up exams 🔹 Regional Director Letters (RDLs) are common and signal heightened regulatory concerns 🔹 Management and boards must track and report progress on corrective actions to avoid further downgrades 🔹 Follow-up exams rarely lead to an immediate upgrade, so credit unions should plan for at least 20 months of heightened oversight 🔹 Recordkeeping and BSA violations trigger even more frequent exams, sometimes every 90 days Resources Mentioned: 📌 NCUA’s National Supervision Policy Manual (for details on CAMEL 3 oversight) 📌 NCUA’s Share Insurance Briefing (for trends in CAMEL ratings) 📌 Credit Union Exam Solutions – Learn more about expert consulting to help navigate NCUA exams
NCUA in 2025: What to Expect & How It Affects You
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/NCUA Predictions: What Will the Do in 2025?Treichel: [00:00:00] Hey everyone, this is Mark Treichel with another episode of With Flying Colors. Today I am flying solo and I am calling this podcast something like what I expect from NCUA in 2025. In preparing for today's show, I took some notes going back and looking at NCUA's Agenda from their board action taken in 2025 and am gleaning based on the Trump administration and the Helpman leadership.What may or what may not happen in 2025 compared to 2024. When you go back and look at 2025. They had canceled two board meetings. So that was one takeaway. They canceled the March, 2024 board meeting, which was the first time in a long time that that had happened. And they canceled the June, 2024 meeting.So this was under then [00:01:00] chairman Todd Harper, who is now a board member at large, although he came close to being named vice chair, and you can check out some of my past podcasts for discussions on why that may have blown up anyway. It things continue to blow up at the board level, but I'll get to that here shortly.All right. They canceled 2 board meetings and they held for N. C. U. S. I. F. share insurance fund briefings. I report on those quite a bit here and on linked in because that's 1 of the few windows to generic camel code ratings. You can see when camel code ratings go up and they did 4 of those. in 2024.I'm expecting they'll do four of those in 2025. They did one cyber security update briefing and they did a new charter update and briefing and tip to what I might say in the future. I think there will be more briefings because I don't think the board will be acting on much because I don't think the board [00:02:00] is currently getting along because of the kerfuffle on NSF and overdraft fees.All right. So other things they did they did a proposed succession planning rule and a final succession planning rule. They did an incentive based compensation proposal, which I think will go nowhere in 2025. That was put out there because Biden's administration required it from all. Banking agencies and under the Trump administration there will be less or zero regulation.And I don't see them wanting to put proposals in on incentives. If you'd know what I mean. In July, there was a loan rate ceiling approval to. re approve utilization of the 18 percent rate. That's what they do every time. The trade associations come out saying you should allow that to go up or you should make it based on variability.If NCOA was ever going to raise it, it would have been last year and or the year before. They [00:03:00] didn't seize that opportunity because they thought it would have been egregiously harmful to credit unions and credit union members. I disagree with that, but they will vote on that again because they have to vote on it and they will likely just do what they've done umpteen years in a row, which is reaffirmed the 18%.I expect that to happen in July again. All right. What else is going to be happening? Potentially, they did have a board appeal in August. By the way, they typically don't have open board meetings in August. That was a closed a closed item where a credit union appealed something without revealing what I know relative to that.That was a field of membership appeal. There was a fair hiring and banking proposal, which doesn't need to repeat in 2025. They simplified the insurance rules. And then when you get close to the end of the year, what happens at the end of the year and CUA approves their budget. But before they approve their budget, they do a budget briefing.A little [00:04:00] bit of history on the budget briefings. The budget briefing started when I was the deputy executive director and they were started by Dennis Dollar. And I remember saying to that executive director, Len Skiles, if you do this, Make sure you want to do it and it was for transparency. But once you start something, it's very difficult to stop it.And I'll get to that and why I'm making that point. I'll get to it now, but I'll refer to it again. So NCOA did stop it. I believe it was under the Matt's administration and the trade associations got upset because that was their opportunity. One of their opportunities to show value saying your budget's too high.Here's why we think it's too high. And through assistance from Senator Mark Warner in Virginia, they were able to get the Federal Credit Union Act proposed, requiring NCUA to do a budget briefing. They are required to do a budget briefing. I believe they will do a budget briefing. I'm not so sure they will do a budget.They're not [00:05:00] required to do a budget, and they are required to do a budget briefing. They're not required to do a budget, and that's because there is a two year budget. So I'll get to that and why I think that they may not do a budget when we walk through what I think will happen in totality in 2025. The NCOA approved their annual performance plan, which is linked to their strategic plan, already in January.That was one of the last things they did prior to Hauptmann taking over. So they don't need to do that annual plan, but they do need to do another strategic plan, and that would be due by the end of 2025 for the years 2026 through 2030. Will they do that? We will see. All right. So when you look at what is going to happen and what I predict will happen in 2024, that's a little bit about what happened.What I'm predicting in 2024 is that the theme of canceling board meetings will continue. They, as I mentioned, they canceled March and June. I'm [00:06:00] expecting that they may cancel April or May. Or June or July, I don't believe they're going to have enough briefings to keep an agenda full. I don't believe they're going to agree on enough things because of the arguments they're having about about NSF fees and overdraft fees being reported by over a billion dollar credit unions.There's two approaches here. Kyle Hauptman canceled and changed the. Way that billion dollar plus credit unions were going were reporting for three quarters on NSFs and overdrafts saying that it's overkill and it's onerous on the credit unions, et cetera, et cetera, and that they would be looking at that during part of the examinations and then after he announced that at GAC and then.Board member Harper and board member Otsuka came out with their own press releases, and I understand they did a full court press on [00:07:00] Capitol Hill on the topic and came out saying that what's wrong with transparency? There should be transparency here. Why are you stopping something that was started and that credit unions had been providing and that's bad for members?So that's the nexus I wanted to say where I mentioned with Dennis Dollar that when he started the budget briefings, I thought they would never be stopped. And it's hard to stop something when you do. What happened? Debbie Matt stopped the budget briefings, and then lo and behold, the Federal Credit Union Act was changed and INSU 8 was required.to do that. So at some point, whether it's when the next time there's a D in the White House or there's a D in running the Dems have control of Congress. And the White House, you're going to see more on the fee situation. You're going to see NCOA go back to collecting this data. Will it be in 4 years?Will it be in 8 years? Will it be sometime sooner than that? [00:08:00] My guess is not before the four year period. I can't see how it went flip floppi...
What It Means If NCUA Asks To Meet With Your Board Without You
Episode Summary:In this episode of With Flying Colors, Mark Treichel, along with industry experts Steve Farrar and Todd Miller, discuss a growing trend—NCUA requesting private meetings with credit union boards. What does it mean when regulators ask to meet without management present? Should boards be concerned? And how should they prepare?With decades of NCUA experience, Steve and Todd share insights into:✅ Common reasons why NCUA requests board-only meetings✅ When a meeting with the board chair is routine vs. when it’s a red flag✅ The importance of listening, but not committing to actions during these meetings✅ Why legal counsel might be necessary in certain situations✅ Whether you should record the meeting—and if NCUA will allow itMark, Steve, and Todd also share real-world examples of how these meetings have played out, including situations where state regulators took a more aggressive approach.Whether you're a board member, CEO, or concerned about your next NCUA exam, this episode provides essential insights to ensure you're prepared if NCUA makes the call.Resources Mentioned:📌 Learn more about Credit Union Exam Solutions: marktreichel.com📌 Subscribe for future episodes and expert insights on navigating NCUA exams.
Emergency Pod: Did NCUA Just Vote On It's Trump Mandated Restructuring Plan?
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Did NCUA just vote on its reorganization plan? Time will tell.https://www.opm.gov/policy-data-oversight/latest-memos/guidance-on-agency-rif-and-reorganization-plans-requested-by-implementing-the-president-s-department-of-government-efficiency-workforce-optimization-initiative.pdf
NASCUS Chair & Iowa Credit Union Division Superintendent Katie Averill
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Recorded just prior to GAC... check out this great interview with Katie Averill of Iowa and NASCUS...
Liquidity Flashback - An NCUA Perspective with Todd Miller
"Liquidity Management: Reading Between the Lines of NCUA's Latest Guidance"In this insightful episode, Mark Treichel and former NCUA Capital Markets Specialist Todd Miller analyze NCUA's April 2023 liquidity webinar and provide their expert take on the agency's current perspective on liquidity management.Episode Highlights:Todd Miller shares his 34-year experience at NCUA, including his roles as a regional capital market specialist and director of special actionsKey liquidity guidance documents discussed: 2010 Interagency Policy Statement on Funding and Liquidity Risk Management, 2013 CU 10 guidance on Regulation 741.12, and the 2023 addendum on contingency funding plansAnalysis of credit union deposit composition changes: from 55% in money markets, CDs, and wholesale funding in 2009 to 52% currentlyDiscussion of "reversion to the mean" in deposit mix and how credit unions have adapted to the rate environmentExamination inconsistencies: varying liquidity ratios and expectations from examiner to examinerThe importance of forward-looking liquidity management versus "rear-view mirror" approachesDisconnect between NCUA's public statements (e.g., "supervisory test is not how credit unions should manage interest rate risk") and examiner actionsHow improved analytics allow credit unions to operate with lower cash holdings while still managing risk effectivelyThe appropriate use of wholesale funding, borrowings, and non-member deposits in liquidity managementWhy well-capitalized credit unions with good asset quality will generally maintain access to liquidityResources Mentioned:2010 Interagency Policy Statement on Funding and Liquidity Risk Management2013 CU 10 guidance on NCUA Regulation 741.122023 addendum to the 2010 interagency statement on funding and liquidity riskIf you're concerned about your credit union's next NCUA exam, visit marktreichel.com to learn how Credit Union Exam Solutions can help you navigate the examination process successfully.
NCUA Pivots on Overdraft Fees and America's Credit Unions Policy Priorities 2025
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/https://ncua.gov/newsroom/press-release/2025/hauptman-announces-changes-ncuas-overdraftnsf-fee-collectionA great Monday at GAC .... listen for details.
NCUA Board Focus: Staff Morale & Safety of Credit Union Deposits
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/NCUA Board focuses on staff morale and safety of deposits. Also what happened to the item making Todd Harper Vice Chairman??Listen and learn.
Why Credit Unions Could Lose Big in Washington’s Regulatory Reset with John McKechnie
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Episode Title: "Credit Unions at a Crossroads: Regulator Consolidation and the Tax Threat"With Flying Colors Podcast | Episode [Number] | Released February [XX], 2025Host: Mark TreichelGuest: John McKechnie, John Ney LLC, Credit Union Policy Expert Overview:In this timely episode, recorded just ahead of the 2025 Governmental Affairs Conference (GAC), Mark Treichel sits down with John McKechnie, a seasoned credit union advocate and former NCUA insider, to unpack the seismic shifts brewing in Washington, D.C. With the Trump administration signaling a potential overhaul of financial regulators and whispers of taxing credit unions, the stakes couldn’t be higher. Will NCUA get swept into a bank-dominated regulatory merger? Could the credit union tax exemption be on the chopping block? John and Mark dive into the uncertainty, the risks, and what it all means for the credit union movement.Key Discussion Points: Regulatory Consolidation Buzz: The Wall Street Journal and Bloomberg report on merging FDIC and OCC into Treasury—what does this mean for NCUA and credit unions? John shares insights from Capitol Hill, including a revealing chat with Senator Tim Scott’s staff. The Share Insurance Fund Risk: How a consolidated regulator could swallow the credit union-backed fund into a bank-centric FDIC system. Taxation Tensions: Banks push to tax “mega” credit unions—are we facing a divide-and-conquer strategy? John breaks down the political and economic arguments credit unions must wield. Exam Burden Reality: NCUA’s lighter touch vs. bank regulators—could credit unions face 35% more scrutiny under a merged system? GAC Game Plan: Why this year’s hill visits might be the most critical yet, and how credit union advocates can make their voices heard. CFPB’s Future: A leaner, less aggressive CFPB under Trump—good news or a distraction from bigger threats?Notable Quotes: “The deck is being reshuffled right now, and I think credit unions should be concerned.” – John McKechnie “If you eliminate the credit union tax exemption, you’re raising taxes on 220,000 of your constituents.” – John McKechnie “This GAC could be as important as any visit to D.C. the movement has ever had.” – Mark TreichelWhy Listen?With uncertainty as the word of the day, this episode is your insider’s guide to the regulatory and legislative battles that could redefine credit unions. Whether you’re flying into GAC or tracking policy from afar, Mark and John deliver the wisdom you need to understand the stakes—and what’s next.
When DORs Become Letters of Understanding * Agreement (LUAs) What You Need to Know
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Have an LUA, or are you worried about getting one? Don't miss this episode.
The Perfect Storm: Credit Risk and Modern Collections with David Reed
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/The Perfect Storm: Credit Risk and Modern Collections with David ReedIn this episode, Mark Treichel sits down with David Reed, of Reed & Jolly law firm, to discuss the pressing issue of credit risk and loan quality in credit unions. As a former in-house counsel and collections manager turned credit union attorney, Reed brings unique insights into modern collection challenges and solutions.Key Topics:Analysis of NCUA's 2024 Supervisory Priorities letter and its unprecedented focus on credit riskRecord-high delinquency rates in credit cards and used car loansThe need to modernize collection practices with new technology and communication methodsImportance of board reporting and corporate governance in managing credit riskBalancing member service with sound financial practices in today's economic environmentGuest: David Reed Contact: david@reedandjolly.com | 703-675-9578
What’s Next for Credit Unions - with Mike Macchiarola of Olden Lane
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Show Notes: With Flying Colors - Interview with Mike Macchiarola of Olden LaneGuest: Mike Macchiarola, Olden Lane (broker-dealer and investment advisor serving credit unions)Key Topics Discussed:- Interest Rate Environment: Impact of "higher for longer" rates on credit unions, with industry cost of funds rising to 218 basis points- Regulatory Changes: Shift in regulatory focus under new NCUA leadership and potential Trump administration impacts- Consolidation Trends: Record year for credit union-bank transactions (22 in 2023) and increasing branch deal activity- Technology & AI: Growing importance of digital platforms while maintaining personal touch ("clicks and mortars")- Profitability Challenges: Industry ROA at 64 basis points with significant variance across institutions- Leadership Demographics: Addressing aging C-suite and board populations while attracting younger talent- Consumer Financial Health: Rising credit card delinquencies (11%) and increasing household debt levels- Fee Income: Evolving regulatory landscape around NSF and overdraft feesContact Information:- Website: www.oldenlane.com- LinkedIn: Mike Macchiarola- Email: Available through contact form on Olden Lane websiteNotable Quote: "If it don't make sense, it don't make dollars." - Mike Macchiarola on credit union profitability
Breaking News: Rodney Hood Is In Charge of the OCC
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Press ReleasesSecretary Bessent Announces Intention to Appoint First Deputy Comptroller of the Office of the Comptroller of the CurrencyFebruary 7, 2025WASHINGTON – Secretary of the Treasury Scott Bessent today announced his intention to appoint Rodney E. Hood as a Deputy Comptroller and to designate him the First Deputy Comptroller of the Office of the Comptroller of the Currency (OCC). In this role, Mr. Hood will also serve as Acting Comptroller of the Currency.“The strong leadership and career experience of Rodney Hood will strengthen the OCC’s efforts to ensure the safety and soundness of the banking system while also enhancing economic growth," said Secretary Bessent.“I remain steadfastly committed to serving the American people and the banking system by creating a regulatory structure that fulfills our obligations, fosters innovation, and promotes financial inclusion, including those Americans who have been debanked and underserved,” said Mr. Hood.The OCC is a bureau within the Department of the Treasury, and the Comptroller of the Currency is appointed by the President with the advice and consent of the Senate. By statute (12 U.S.C. § 4), the Treasury Secretary is responsible for appointing up to four Deputy Comptrollers of the Currency and designating one as the First Deputy Comptroller. During a vacancy in the position of Comptroller, the First Deputy Comptroller possesses the powers and performs the duties of the office of Comptroller.Mr. Hood was previously confirmed by the U.S. Senate in 2005 and again in 2019 to serve on the National Credit Union Administration Board. In 2019, President Donald J. Trump designated him as Chairman of the NCUA Board. Before entering public service, Mr. Hood held senior roles in retail finance, commercial banking, affordable housing, and community development at JPMorgan Chase, GE Capital, Bank of America, Wells Fargo, and North Carolina Mutual Life Insurance Company.A North Carolina native, Mr. Hood holds a bachelor’s degree from the University of North Carolina at Chapel Hill.
ALCO In Practice: Essential Reports Analysis and Risk Management
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Key Topics to Include:Economic data and analysisFinancial statement reviewKey performance/risk indicatorsLiquidity reportingInterest rate risk analysisInvestment portfolio oversightScenario testing and stress analysisModel validation and risk assessmentCredit risk integrationDocumentation and minutes
Did You Agree to That?
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Summary:In this special Archive episode of With Flying Colors, Mark explores the meaning and implications of "agreed upon corrective action" in credit union examinations. Drawing from his experience at NCUA, Mark explains how this term appears on examination reports and why its proper implementation is crucial for credit unions.Key Points Covered:Mark begins by breaking down the literal meaning of "agreed upon" using dictionary definitions, emphasizing that it means coming to a mutual arrangement or understanding. He shares a recent case where a small credit union reached out about their examination frustrations, highlighting how the agreed-upon process can sometimes break down.The Process:The examination report process typically includes a draft phase where credit unions can review and discuss findings with examiners. However, due to year-end pressures and internal goals, sometimes reports are finalized without proper consultation. Mark explains that the examination report's cover page explicitly states it should document "agreed upon corrective actions," making it important for credit unions to ensure they actually have input in this process.Recommendations for Credit Unions:Mark advises credit unions to push back when they don't receive proper opportunity for input. He suggests starting with the examiner, then moving up to the supervisory examiner if necessary. While NCUA has final authority on safety and soundness issues, credit unions should still receive the opportunity to influence report language to better serve their needs and their members' interests.Important Context:The podcast notes that NCUA implemented a higher level of review for examination reports, requiring supervisory review. While this creates more consistency, it can sometimes make immediate dialogue more challenging, especially when reports are delivered as final without prior discussion.Closing Thoughts:Mark emphasizes that credit unions must decide when to "go along to get along" versus when to advocate for changes. The goal should be finding language that satisfies both NCUA's safety and soundness requirements and the credit union's operational needs.Contact Information:Listeners can learn more about Mark's services at markteichel.com. The podcast releases new episodes once or twice weekly, providing expert insights on achieving success with NCUA.
Kyle Hauptman is NCUA Chairman: What It Means for Credit Unions
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Kyle S. Hauptman Designated as NCUA Board ChairmanALEXANDRIA, Va. (Jan. 22, 2025) – President Donald J. Trump has National Credit Union Administration Vice Chairman Kyle S. Hauptman as the thirteenth Chairman of the NCUA Board.“I am deeply honored that President Trump has asked me to serve as Chairman of NCUA,” Chairman Hauptman said. “I look forward to leading the agency’s dedicated professionals and working with my Board colleagues to create a regulatory structure that promotes growth, opportunity, and innovation within the credit union system.“My priorities as Chairman include:Re-examining the current NCUA budgeting process.Convening groups of NCUA employees to identify achievable internal efficiencies to reduce unnecessary frictions in the agency’s operations.Promoting the appropriate use of artificial intelligence (AI) as a tool for NCUA employees. One goal is enhancing productivity, but it’s also true that regulators who use technologies are more apt to understand why the regulated use them.Focusing on true financial inclusion, which means removing barriers to de novo credit unions and removing the ‘pain points’ that have led to fewer and fewer small credit unions. NCUA should be mindful that the only people who think compliance is easy are those that don’t have to do it.Codifying our procedures to protect Americans from regulation-by-enforcement. For example, no enforcement action should ever set - even clarify - policy. In America and other free societies, the sequence is: set speed limits, then give speeding tickets (no one has any obligation to be aware of someone else’s ticket).Making clear that credit unions and their members are best positioned to assess their communities’ climate risks.Re-assessing NCUA policies that may, even inadvertently, dissuade credit unions from serving low-income areas. This includes language around overdraft policies, particularly for credit unions located in states with especially punitive government late fees/penalties.Right-sizing credit unions’ obligations where possible under the Bank Secrecy Act, including NCUA’s regulations surrounding Suspicious Activity Reports.”
Capital Rules and Risk Management for Credit Unions
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/Episode Summary:In this episode of With Flying Colors, host Mark Treichel sits down with Steve Farrar, a former NCUA examiner and capital expert, to discuss the complexities of credit union capital management. With decades of experience, Steve shares insights into the evolution of capital regulations, the purpose of regulatory capital, and the challenges credit unions face in maintaining the right balance between risk and growth.Key Takeaways:Steve Farr’s Background: Steve shares his extensive career journey, from starting as an NCUA examiner in 1987 to becoming a key player in regulatory capital rulemaking.Purpose of Regulatory Capital: Understand why capital is essential for credit unions, from absorbing losses to maintaining public confidence.Net Worth Ratios and PCA: Dive into the history and significance of net worth ratios in ensuring credit union stability.New Complex Credit Union Leverage Ratio (CCULR): Learn about the simplified capital adequacy measure introduced in 2023 and its implications for credit unions.Risk-Based Capital: Explore how this tool provides credit unions with a tailored perspective on their capital adequacy.Capital Management Strategies: Discover best practices for developing a capital plan that aligns with your credit union’s unique risks and opportunities.Listener Questions:Have questions about credit union capital or topics from today’s episode? Send them to Mark via email at cu.exam.solutions@marktreichel.com or through his website at www.marktreichel.com. Your question might be featured in a future episode!Contact Information:For consulting inquiries or to learn more about how Mark and Steve can assist your credit union, reach out using the above contact details.Closing Thoughts:This episode highlights the importance of a strategic approach to capital management. Whether you’re grappling with regulatory requirements or looking to optimize your capital structure, this conversation offers valuable guidance for credit union leaders
Overdraft Fees Under the Microscope: NCUA’s Latest Guidance Decoded
www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/## Episode Summary: NSF and Overdraft Fees - What You Need to KnowIn this episode, Mark Treichel interviews Joe Goldberg, former director of the NCUA's division of consumer compliance policy and outreach, about the December 2024 NCUA letter addressing consumer harm from certain overdraft and NSF fee practices.### Key Topics Covered:Joe Goldberg discusses NCUA's recent guidance on problematic overdraft fee practices, including:1. Authorized Positive Settled Negative (APSN) fees - When a debit transaction is approved with sufficient funds but settles negative due to intervening transactions2. Multiple re-presentment fees - When members are charged multiple NSF fees for the same check/ACH item being represented3. Return Deposited Item (RDI) fees - When members are charged for depositing third-party checks that are returnedThe episode also covers:- NCUA's historical approach to overdraft oversight since 2005- Risk management principles credit unions should consider- The agency's current supervisory approach and expectations- New research findings on overdraft/NSF fee revenue at credit unions### Key Takeaways:- Credit unions should review their overdraft programs for compliance with current guidance- Self-identification and correction of issues is viewed favorably by NCUA- Overdraft/NSF fees typically comprise 2-5% of credit union revenue- The agency will continue monitoring these fees through call report data- Credit unions should ensure fee practices are fair and clearly disclosed to members### Featured Guest:Joe Goldberg - Former Director, Division of Consumer Compliance Policy and Outreach at NCUA (2014-2021)### Host:Mark Treichel - With Flying Colors Podcast
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