NCUA Meeting Recap: MDI, NGN, and RFI on Exam Tech

NCUA logo

During this week’s National Credit Union Administration (NCUA) board meeting, Chairman Rodney Hood said onsite exams will not resume on July 6, as previously announced, due to current COVID-19 activity. 

Additionally, the proposed rule for Risk-Based Net Worth was removed from agenda discussion.

Minority Depository Institutions Annual Report
The board was briefed on the MDI Annual Report. A federally insured credit union can qualify as an MDI if 50 percent or more of its board members, current members, and eligible potential members combined with current members are minorities.

Here are a few highlights from the report:

  • In 2019, there were 514 MDI credit unions with total assets of $40.5 billion and more than 3.9 million members.
  • In 2018, there were 529 MDI credit unions with total assets of $38.5 billion and nearly 3.9 million members.
  • In 2019, NCUA chartered one new MDI federal credit union (Otoe-Missouria FCU in Red Rock, OK).
  • In 2019, 58 MDI credit unions were awarded $738,000 in technical assistance grants; three MDIs received $75,000 as part of the MDI Mentoring Pilot Initiative.

Reminder: applications for 2020 mentoring grants must be received by the agency no later than July 31, 2020.

NCUA Guaranteed Notes Oversight Program
The board received a comprehensive briefing on the NGN program. Staff announced a distribution to Southwest Corporate certificate holders equal to roughly 42 percent of $403.5 million ($171 million) of membership capital. Affected credit unions will be notified of the amount and other payment details; the payout is planned for July.

In addition, staff mentioned that US Central, Members United, and Constitution certificate holders may also receive future distributions, but such distributions would not occur until sometime in 2021. The NCUA does not project any recoveries to WesCorp former capital holders in any scenario.

More information on the corporate system resolution can be found here.

RFI: Strategies for Future Examination and Supervision Utilizing Digital Technology
The board issued an RFI (Request for Information) to solicit feedback on alternative procedures to modernize the agency’s examination program, including aspects related to virtual examinations. The RFI also seeks input on any unnecessary hurdles or burdens credit unions face with respect to their ability to leverage various technological advances.

Through modernization, the NCUA intends to:

  • Reduce burden on credit unions and increase agency efficiency by reducing onsite examination time.
  • Improve offsite supervision capabilities.
  • Provide more consistency and standardization for the examination and supervision process.
  • Improve communication between examiners, credit unions, and state supervisory authorities.
  • Explore and evaluate technology utilization and appetite for adoption.

The NCUA will accept comments on the RFI for 60 days following publication in the Federal Register.

Pin It