Navigating NCUA's Guidance: Understanding the NSPM and Examiner's Guide
In the ever-evolving landscape of credit union regulation, staying informed about the National Credit Union Administration's (NCUA) guidance documents is crucial. Recently, on the "With Flying Colors" podcast, we delved into two key NCUA resources: the National Supervision Policy Manual (NSPM) and the Examiner's Guide. Here's what credit union professionals need to know.
The Shift from Examiner's Guide to NSPM
Historically, the Examiner's Guide was the go-to resource for NCUA examiners. However, around 2013, the NCUA introduced the NSPM to create consistency across regions in exam processes and policies. This shift was driven by concerns about regional differences in applying regulations and enforcing policies.
Key Points About the NSPM:
1. Frequent Updates: Currently on version 22, the NSPM is updated regularly to reflect current policies and procedures.
2. Redacted Sections: Parts of the NSPM are not publicly available, including crucial information on concentration risk thresholds.
3. Important Chapters: Credit unions should focus on chapters covering district management, federal and FISCU programs, and regulatory waivers.
The Current State of the Examiner's Guide
While the Examiner's Guide is now outdated in many areas, it still holds value:
• Reference Sections: These remain useful for credit unions researching specific topics.
• Outdated Links: Many links within the guide are broken or lead to outdated information.
• Difficult Access: Unlike the NSPM, the Examiner's Guide can't be easily downloaded and searched.
Transparency Concerns
The podcast highlighted several transparency issues:
1. Hidden Job Aids: Under the new MERIT system, examiner job aids and questionnaires are not publicly available, unlike in the previous AIRES system.
2. Concentration Risk Thresholds: Despite being a significant cause of losses, NCUA's thresholds for concentration risk are redacted from public view.
3. Comparison to Other Regulators: The FDIC and OCC are noted as being more transparent about their exam processes.
Navigating NCUA Guidance
For credit unions preparing for exams or seeking to understand NCUA expectations, consider these tips:
1. Focus on the NSPM: This is now the primary document guiding NCUA supervision.
2. Review Key Chapters: Pay special attention to chapters on district management and program-specific information (federal or FISCU).
3. Utilize Reference Sections: While outdated, the Examiner's Guide's reference sections can still provide valuable regulatory citations.
4. Stay Updated: Given the frequent NSPM updates, regularly check for new versions.
Conclusion
Understanding NCUA's guidance documents is essential for credit union compliance and exam preparation. While the shift to the NSPM has brought more consistency, it has also raised concerns about transparency. Credit union professionals should stay informed about these resources and their implications for day-to-day operations and long-term strategic planning.
As the regulatory landscape continues to evolve, maintaining open dialogue with examiners and leveraging available resources will be key to navigating NCUA supervision successfully.
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