Summary: Letter to Credit Unions 20-CU-17 Update to Offsite Examination and Supervision Approach

Letter to Credit Unions 20-CU-17 Update to Offsite Examination and Supervision Approach

May 2020

NCUA is updating its supervisory approach implemented in response to the COVID-19 crisis and originally announced in March in Letter to Credit Unions 20-CU-05, Offsite Examination and Supervision Approach. Notably, NCUA’s updated approach includes a return to issuing Reports of Examination (ROE).

Ø  Conducting Work Offsite

NCUA will continue to operate with its employees and contractors working offsite and will continue its general moratorium on new on-site exam work until further notice. However, NCUA may conduct onsite work at a credit union as necessary to address serious or time-sensitive matters. NCUA noted since March 16, 2020 NCUA examiners have conducted offsite examination work at over 100 credit unions. NCUA examiners will continue to be mindful of the impact exam information requests may have on a credit union experiencing operational and staffing challenges associated with the COVID-19 pandemic. NCUA Regional offices will continue to coordinate with SSAs on supervision efforts for FISCUs.

Ø  Issuing Examination Reports


NCUA will begin issuing ROEs for the examinations NCUA examiners complete off-site. NCUA reiterated that corrective actions issued to a credit union would consider the impact of the COVID-19 pandemic on the credit union’s operations and financial condition. In announcing this change, NCUA emphasized:

  • Credit unions would not be criticized for efforts to provide prudent relief for members so long as those relief efforts are conducted in a safe and sound manner. NCUA examiners WILL consider whether a credit union’s relief efforts elevate, or reduce, a credit union’s risk exposure.
  • Additional risk, even if prudently undertaken, may be reflected in NCUA’s CAMEL rating of the credit union.
  • TO ensure consistent application of these concepts, NCUA has instituted an enhanced internal review process for all ROEs.

For more information on the CAMEL rating system, see NCUA’s Letter to Credit Unions, 07-CU-12, CAMEL Rating System.

This amended off-site approach became effective on June 1, 2020.