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NCUA To Expand 5300 Share Overdraft Data Collection & Is Considering Separate Consumer Compliance Scores

NCUA plans to:

Expand 5300's to Collect More Share Overdraft Data, and

is considering a CAMEL Like Consumer Compliance Rating and/or Separate Compliance Exams?

That's my big takeaway from Chairman Todd Harpers Q&A at the Brookings Institute.

Specifically, Chairman Harper was asked why banks must report on overdraft data and credit unions do not. His answer revealed that NCUA will soon require large credit unions – which he defined as over one billion in assets will soon have to report this data.

Here's his answer:

"So, the world is changing, Aaron. On the bank side of the ledger, the banks have long had a requirement that for billion -dollar plus institutions, they have to report an aggregate number of their overdraft and non -sufficient fund fees collected.

We are in the process of going through the Paperwork Reduction Act steps that we've got to go through to amend our call reports. We will require, for those credit unions above a billion dollars in assets, …they make up roughly 90 percent of the industry's assets. We will require, this is going to be different from banks, we're going to require separately reporting of overdraft fees and non -sufficient fund fees.

So, you'll have greater granularity in order to track...”

Chairman Harper in response to another question, went on imply that NCUA will move toward separate compliance examinations or separate “compliance scores”

Here is what he said:

“…the people who manage the credit union aren't always, their interest doesn't always align with that of the members.

And it's our job to make sure that there's an alignment there. When there is a credit union acquires a bank, and we've seen that happen recently, there are about 64 in the last decade or so, why is it that on the bank side of the ledger there is a separate consumer compliance exam with a separate consumer compliance score that is done every three years, and that's not done on the credit union side?

We're working to fix that problem and to change that problem..."

You can listen to these answers and also all of the Chairman's prepared remarks for the speech audiobook style here:

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