
# Navigating NCUA Exam Appeals at the Regional Level: Insights from a Former Insider
In the latest episode of the "With Flying Colors" podcast, host Mark Treichel sat down with Todd Miller, a former NCUA employee with nearly 34 years of experience, to discuss the intricacies of exam appeals at the regional level. With roles ranging from examiner to director of special actions, Todd brings a wealth of knowledge to help credit unions understand and navigate the appeal process effectively.
## Recent Changes in NCUA's Exam Process
Before diving into appeals, Todd highlighted some recent changes in NCUA's exam report process:
1. Reports now undergo higher-level reviews before issuance.
2. Credit unions no longer see draft reports, only draft exam findings and DORs (Documents of Resolution).
3. Camel codes are not discussed during exams, as they require approval at higher levels.
These changes emphasize the importance of clear communication throughout the exam process.
## Avoiding Appeals: Prevention is Better Than Cure
Todd stressed that the best way to handle appeals is to avoid them altogether. Here are some key strategies:
- Communicate openly and honestly with exam staff throughout the process.
- Understand risk ratings and proposed DORs/exam findings during the exam.
- Negotiate corrective actions during the exam when possible.
As Todd put it, "If you're communicating openly, honestly, with your examiners during that exam process, we shouldn't have surprises and things shouldn't go to the appeal process at all."
## When Appeals Become Necessary
Despite best efforts, sometimes appeals are unavoidable. If you find yourself needing to appeal, here's what you need to know:
1. **The Appeal Process:**
- Start with the examiner, then move to the supervisory examiner, and finally the regional director.
- Adhere to timeframes for formal appeals (typically within 30 days).
- Gather comprehensive documentation to support your case.
2. **Considerations for Appealing:**
- Weigh the cost-benefit of appealing versus implementing changes.
- Don't fear retaliation; appeals can be successful at the regional director level.
- Start with the supervisory examiner, even for complex issues involving specialists.
Todd reassured listeners, "Credit unions have pretty good success at the regional director level of proving their case, and it's just because honest mistakes throughout the exam process. We're all human and examiners sometimes make mistakes and miss things."
## Handling Personality Conflicts
An interesting aspect of appeals that Todd addressed was the issue of personality conflicts. He noted that these can sometimes be addressed as part of the appeal process. Supervisors may consider reassigning examiners depending on the situation, especially for well-run credit unions where the conflict is purely personality-based.
## Key Takeaways
1. Communication is crucial to avoiding surprises and potential appeals.
2. Don't be afraid to appeal if there's a material disagreement.
3. Appeals at higher levels (beyond the regional director) can be more costly and time-consuming.
Todd's final piece of advice? "If you feel strongly about it, that the examiner is wrong, don't be scared to appeal. If it's a material issue, it's fine."
By understanding the appeal process and focusing on clear communication throughout the exam, credit unions can navigate NCUA exams more effectively and maintain positive relationships with their examiners.
You can listen to the entire episode HERE.
Reach out to learn how we assist our clients with NCUA so they save time and money.
Comments