In an effort to form a closer working relationship with federal regulators, the LSCU's President/CEO Patrick La Pine, Will McCarty, senior vice president of Governmental Affairs; Bill Berg, vice president of Regulatory Affairs; and Scott Morris, compliance director, met with Region III senior officials from the National Credit Union Administration (NCUA) in Atlanta. Herb Yolles, regional director; Timothy Hornbrook, assistant regional director of operations; and Donna Woods, director of supervision represented the NCUA.
Disaster coordination was one of the first issues that was addressed along with a productive discussion of how the LSCU and NCUA can coordinate efforts during what is predicted to be a very active hurricane season. The LSCU and the NCUA agreed to share contact information, when needed. La Pine was pleased with the open and frank discussions and said, "Credit unions in Alabama and Florida know that many members are hurting because of the oil spill. Now that hurricane season is here, it just throws another obstacle in front of them. As credit unions, we need to find a way to offer short term loans and one-on-one counseling. It was important that the NCUA hear from us the need for a closer partnership on a plan to help the affected members."
The recent Federal Financial Institution Examination Council (FFIEC) was also discussed along with state supervisors' suggestions for dealing with financial institutions whose members or customers have been affected by the Deepwater Horizon Oil Spill. The LSCU is developing a plan to address how credit unions can assist their members who have been affected by the spill and receive regulatory forbearance.
During the meeting Yolles said, "the NCUA will be much quicker on the trigger when examinations identify problems in credit unions." Some of the regulatory hot buttons that will be dealt with more aggressively by the NCUA in the future include:
Repeat items identified during exams that have been listed in DORs (Documents of Resolution) in the past could lead to a Letter of Understanding and Agreement (LUA)
Appropriate funding of Allowance Accounts given the fallout from the Great Recession
Troubled Debt Restructuring
Credit unions must show a good faith effort and progress on items listed in a DOR. As custodian of the National Credit Union Share Insurance Fund, the NCUA has a heightened sense of urgency. Credit union's not making a good faith effort to comply with a DOR should expect a LUA or other more serious administrative action such as Cease and Desist Order.
All topics covered during the meeting will be communicated in greater depth in an email this week, plus the third-quarter edition of Signal Magazine.
Photo caption: LSCU President/CEO Patrick La Pine (left) with NCUA Region III Director Herb Yolles.