Credit Union Exam Solutions Presents With Flying Colors

Mark Treichel's Credit Union Exam Solutions
  • 5.0 (14)
  • Management
  • Weekly

Tips for Credit Unions Success on the NCUA Examination. Brought to you by Mark Treichel's Credit Union Exam Solutions.

  1. 2d ago

    NCUA Drops Office-by-Office Detail From Its 2027 Budget

    www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ NCUA has released its 2027 staff draft budget, and this is Mark Treichel's first take: what it is, what changed, and what's missing. It's a two-year budget, 2027 and 2028, so NCUA can keep operating if it doesn't have a full board or can't get a vote. Mark sets the 2028 figures aside to keep it simple. Headline numbers •     Budget just over $325 million, up 2.9% — $9.2 million over the 2026 approved amount. That increase is essentially pay: NCUA is required to maintain comparability with the other banking regulators and has a union contract it has to live up to, and it typically pays non-union staff similarly. •     972 full-time equivalents (FTEs), up five from last year and down 23% from the peak of 1,255 in the 2025 budget, after the buyouts. •     Overhead transfer rate (OTR) of 62% — a number NASCUS will comment on. •     Operating fee down 49 basis points, after a large drop last year tied to the reorganization and buyouts. •     Operating budget up 8.2%: pay and benefits and contracted services up, travel down a little, rent, communications, utilities, and administrative up a little. •     Roughly 70% paid by federal credit unions through the operating fee and their share of the OTR; roughly 30% by state charters, for insurance-related exam work. Also in this episode •     Why calling it a "staff draft" is a little funny, and why the budget used to be Mark's Super Bowl as NCUA Executive Director. •     The reorganization: target date now December 2027; prioritize statutory and most critical work, consolidate units with like functions, raise the supervisor-to-employee ratio, use technology for efficiency. The Office of the Chief Economist has been rolled into the Office of Examination and Insurance (E&I). About $1 million of a $16 million reorganization fund was spent. •     The Office of National Examinations and Supervision (ONES): the draft doesn't say what's happening. ONES' budget is down 1.2%; the large credit union analytic tool, paid from the insurance fund, is up 7.2%, mostly tied to stress testing. •     AI becomes SI: $4.3 million earmarked for superintelligence/AI after Executive Order 14434. "It's a name, it's not a mandate." Some of the five new positions go to AI, paired with a zero-trust cybersecurity push. The artist formerly known as Prince, and the time "lump sum" became "pay policy." •     Questions the draft doesn't answer: will examiners use AI and credit union data in exams; what governance and model risk controls apply; how results are explained to credit unions; which vendors, and where the data goes. •     New initiatives: the GENIUS Act and stablecoin issuers, the 21st Century Road to Housing Act, and possibly a new position — Mark's words, not NCUA's, likely on the stablecoin side. Deregulation year two turns to more complex rules; Mark guesses commercial lending and risk-based capital, and "time will tell." •     Line items: $300K to digitize chartering; cybersecurity $4.7 million including a $3 million firewall refresh; CDRLF grant system $605K; e-discovery $300K; board priorities $500K; Asset Management and Assistance Center (AMAC) liquidation tracking tool $106K, charged directly to the Share Insurance Fund. •     Material loss reviews: Jackson Area Federal Credit Union could be a large one. MLRs appear once in the draft, in the audit and financial management support category (4.4% of contracts, about $3.2 million). The inspector general's budget rises from 4.1 to 4.8 — Mark's guess is contracting, potentially tied to MLRs. •     What's missing: the draft has gone from a peak of 109 pages in 2021 to 26. What came out, year by year — and in 2027, positions by office and per-office line items for pay, travel, rent, admin, and contracts. •     Three possible reasons the office detail is gone, two good and one bad — and why Mark doesn't think it's the bad one. •     Why Congress required a public draft, what the law says, the fair counterpoints, and what to watch and ask for. Mark plans a follow-up after the hearing.

  2. 6d ago

    The Escalation Ladder: What Every Credit Union Leader Needs to Know About Informal Enforcement Actions

    www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ As CAMEL codes continue to deteriorate across the industry, credit unions are seeing more examiner findings, documents of resolution, and other informal enforcement actions show up in their exam reports. In this episode, Mark Treichel is joined by former NCUA veterans Steve Farrar and Todd Miller to break down what each of these actions means, how they connect, and what credit union leaders should do when they receive them. Topics covered in this episode: The hierarchy of exam report actions — from supplementary facts to regional director letters, and how issues escalate from one level to the next. What examiners are really telling you with a high volume of findings, and why a long list of minor issues may signal something bigger. The SMART principle for documents of resolution — Specific, Measurable, Achievable, Results-oriented, and Timely — and where it breaks down in practice. Why the negotiation process between examiners and credit unions matters, and what happens when that conversation gets shortcut. The cost problem: when corrective actions require millions of dollars in resources that examiners may not have considered. What boards should and shouldn't do when asked to approve a DOR at the joint conference. Corporate governance as NCUA's emerging focal point, and why expectations from larger institutions are creeping down to smaller credit unions. The critical role of communication — on both sides — in preventing exam report issues from escalating unnecessarily. Key takeaway: Credit unions that invest in open communication with their examiners, understand the escalation path, and proactively build governance frameworks are far better positioned to manage regulatory expectations — before problems compound.

    The Escalation Ladder: What Every Credit Union Leader Needs to Know About Informal Enforcement Actions

  3. 6d ago

    WFC Classic: Letters of Understanding and Agreement (LUAs) & What You Need to Know

    Mark Treichel, Steve Farrar, and Todd Miller discuss Letters of Understanding and Agreement—when NCUA uses them, what boards need to understand before signing, and how to satisfy one once it's in place. What You'll Learn The difference between published and unpublished LUAs and why it matters for reputation risk Why dissenting board members are still accountable after an LUA is signed How to negotiate LUA terms before committing What "achieving intended results" means for satisfying an LUA When to bring in outside counsel Key Takeaways LUAs signal serious problems. Most credit unions receiving one are classified as troubled. NCUA has exhausted informal options. Voting no doesn't protect you. Every board member is accountable once the board signs, regardless of how they voted. Negotiate before you sign. Ensure timeframes are realistic and you have resources to deliver. Focus on root causes. If everything's a priority, nothing is. Identify the fundamental issues. No expiration date. LUAs stay open until NCUA says you've completed actions AND achieved results. Guest Background Steve Farrar: 30+ years at NCUA; wrote the enforcement manual Todd Miller: Nearly 35 years at NCUA; former Director of Special Actions Connect Questions about LUAs or other enforcement actions? Contact Credit Union Exam Solutions at marktreichel.com

  4. Oct 26

    Incidental Powers: You Don’t Need a General Counsel Opinion to Petition the NCUA Board

    www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ NCUA’s deregulation project is moving again. John Crews has his first package, three proposed rules out for comment, and in this solo episode Mark Treichel walks through one of them: the incidental powers rule. The bottom line: this is a clarifying rule, not a new power. One sentence is being struck from the petition section, and two sections are being touched, the petition section and the scope section. There are zero new requirements, zero new costs, and zero new information collections for federal credit unions. The message is that a federal credit union does not need an Office of General Counsel (OGC) opinion before petitioning the NCUA board to approve a new incidental powers activity. In this episode: •     Where incidental powers fit: the express powers in the Federal Credit Union Act versus the activities NCUA has pre-approved as necessary or requisite to the business •     The pre-approved categories, from certification services and charitable donation accounts to excess capacity, finder activities, stored value products, and trustee and custodial services •     The two doors: asking OGC whether an activity already fits a pre-approved category, or petitioning the NCUA board directly •     The 2001 problem: the preamble said an OGC opinion wasn’t required; the rule said you should get one •     What the scope section drops, and why the rule doesn’t apply to corporate credit unions •     What stays the same: the categories, the application contents, and approval for one federal credit union meaning approval for all •     Why a call to OGC can still be a smart thing to do •     State charters: this is not your rule •     The comment deadline: on or about December 14, a 60-day period from October 15 publication Read the proposed rule: [Federal Register link] Questions about an activity your credit union is considering? Reach out to Mark at marktreichel.com.

  5. Oct 22

    Examiner Findings, DORs, and Regional Director Letters — What They Mean and How to Respond

    Show Notes: As CAMEL codes continue to deteriorate across the industry, credit unions are seeing more examiner findings, documents of resolution, and other informal enforcement actions show up in their exam reports. In this episode, Mark Treichel is joined by former NCUA veterans Steve Farrar and Todd Miller to break down what each of these actions means, how they connect, and what credit union leaders should do when they receive them. Topics covered in this episode: The hierarchy of exam report actions — from supplementary facts to regional director letters, and how issues escalate from one level to the next. What examiners are really telling you with a high volume of findings, and why a long list of minor issues may signal something bigger. The SMART principle for documents of resolution — Specific, Measurable, Achievable, Results-oriented, and Timely — and where it breaks down in practice. Why the negotiation process between examiners and credit unions matters, and what happens when that conversation gets shortcut. The cost problem: when corrective actions require millions of dollars in resources that examiners may not have considered. What boards should and shouldn't do when asked to approve a DOR at the joint conference. Corporate governance as NCUA's emerging focal point, and why expectations from larger institutions are creeping down to smaller credit unions. The critical role of communication — on both sides — in preventing exam report issues from escalating unnecessarily. Key takeaway: Credit unions that invest in open communication with their examiners, understand the escalation path, and proactively build governance frameworks are far better positioned to manage regulatory expectations — before problems compound.

    Examiner Findings, DORs, and Regional Director Letters — What They Mean and How to Respond

  6. Oct 19

    NCUA’s Fidelity Bond Proposal: What Changes for Your Board

    www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ NCUA’s proposed rule on fidelity bonds came out October 15, approved by the board on October 13 — the board of one, John Crews. In a very short summary, NCUA proposes to roll back the 2019 procedural mandates in Parts 704 and 713. In this solo episode, Mark walks through what changes, what doesn’t, and what boards should be thinking about before the 60-day comment period closes in mid-December. The proposal at a glance. Four sections amended: 704.18, 713.2, 713.4, and 713.5. The 2019 procedural mandates on board review, signer rotation, and the sunset of bond forms are rolled back. It’s deregulatory by design. Boards get more flexibility on the process but still owe the credit union adequate coverage for the risk. How Part 713 got here. 1999: Part 713 created, with the fidelity bond rules moved out of 701.20 and rewritten for clarity. 2005: higher minimum coverage; maximum deductible raised from $200,000 to $1 million for some credit unions. 2019: the process tightened — board review of every application, approval by resolution in the minutes, a rotating non-employee signer, post-liquidation coverage, and a ten-year form sunset. 2021: a technical fix when CAMEL became CAMELS. 2026: rollback proposed. Why 2019 tightened the process. Losses. Bond issuers rescinded coverage when the person who signed the application already knew about the fraud. Change one: review, approval, and delegation. The board or a duly authorized individual on the board, supervisory committee, or audit committee reviews and approves the bond. No board resolution is required in the proposed text. Delegation is an option, not a mandate. Who signs. A board member, or a duly authorized supervisory or audit committee member, who is not an employee. Who cannot sign: the CEO, the manager, or any other employee — the people NCUA sees as most likely to know of a fraud or a pending claim. “Duly authorized” can come from a specific board delegation or by virtue of assigned duties; Mark’s interpretation is that a position description could do it. Change two: signer rotation goes away. NCUA’s reasoning: a real burden for small credit unions with few non-employee directors to rotate through. The non-employee signer requirement stays, oversight stays with the board, and the annual coverage review is unchanged. Change three: no more ten-year sunset on bond forms. The Act lets the NCUA Board approve the form of the bond and sets no limit. What stays: NCUA-approved forms only; NCUA can review any form at any time and rescind approval; amended forms and limiting riders still need NCUA approval. Taking the “should” out of coverage. 713.5(b) — the board should purchase additional coverage as circumstances warrant — is purely advisory and restates existing fiduciary responsibilities. 713.5(c) — increased coverage tied to cash on hand and money in transit — is a two-factor formula NCUA calls prescriptive and ambiguous. Both proposed for removal. Minimum coverage amounts are unchanged. Deductible provisions are renumbered. Corporate credit unions. Parallel changes: the same delegation option, the ten-year form sunset removal, form approval. A question for comment on whether NCUA should drop the corporate board’s duty to buy coverage above the minimum when necessary. And a one-word fix: “and” becomes “or,” so an amended form or a limiting rider each needs NCUA approval on its own. NCUA says the effect is none. What doesn’t change. Annual board review. Minimum coverage. Post-liquidation coverage. Approved forms only. What boards should be thinking about. Nothing changes until a final rule. If you delegate, put it in writing. Keep the signer truly independent. Without the formula, your analysis carries the weight. Weigh in if you have a view — corporates especially. Comments are due mid-December. NCUA contact: Damon Frank, Office of General Counsel, 703-518-6540.

  7. Oct 15

    WFC Classic: Facing the Challenges of a CAMEL Code 4

    | WFC Classic: Facing the Challenges of a CAMEL Code 4

  8. Oct 12

    4 Failed Credit Unions, 10 Failure Themes: What the Inspector General Found

    www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ The NCUA Office of Inspector General (OIG) did four limited reviews of credit unions that failed: Teamsters Local 92 Federal Credit Union in Canton, Ohio; Team Financial Federal Credit Union in Houston, Texas; North Bay Credit Union in Santa Rosa, California; and Copper and Glass Federal Credit Union in Glassport, Pennsylvania. They are OIG Reports 26-06, 26-07, 26-08 and 26-10. Three ended in assisted mergers. Copper and Glass went to conservatorship and liquidation. The losses to the National Credit Union Share Insurance Fund (NCUSIF) totaled $8.62 million, and 83 percent of that came from the two big ones, North Bay and Copper and Glass. None of the four hit the statutory material loss threshold, which is why the OIG did a limited review. Jackson Area will be different — that one they’re going to have to do. I downloaded all four reports and pulled out ten failure themes, scored as central finding, indicator, or not raised. The scoring is my take on their words. Four themes were central in every report: unreliable books or no reconciliation, weak internal controls and segregation of duties, thin or inexperienced staff, and board and audit oversight gaps. The basics broke everywhere, and the exotic broke once. In this episode: •     Why NCUA has zero tolerance for accounting issues — and why it does an exam, not an audit •     What fewer exam visits mean for a well-run credit union, and for the insurance fund •     Two-person staffs, relatives on staff, and a teller cited for insider transactions who was promoted to manager with sole access •     Eight years on a fictitious fidelity bond at Team Financial •     How each problem surfaced: a regular exam, a call to the OIG fraud hotline, a joint exam with the state — and 60 months at Copper and Glass •     North Bay’s complexity pattern: a fintech subsidiary, a cannabis CUSO, a core conversion, and commercial loans over statutory limits •     If you’re acquiring a failed credit union, why I’d usually take it as a liquidation rather than a merger •     What the OIG memos don’t tell us, including the CAMELS path •     Eight questions to ask your board this quarter OIG reports are on the NCUA website under About Us:  https://ncua.gov/about/inspector-general Mark Treichel spent 33 years at NCUA, eight as Executive Director, and now helps credit unions work through NCUA exams, Documents of Resolution (DORs), and enforcement matters at Credit Union Exam Solutions (CUES).  www.marktreichel.com

See All (393)

Trailer

Ratings & Reviews

5
out of 5
14 Ratings

About

Tips for Credit Unions Success on the NCUA Examination. Brought to you by Mark Treichel's Credit Union Exam Solutions.

Information

  • Creator
    Mark Treichel's Credit Union Exam Solutions
  • Years Active
    2022 - 2026
  • Episodes
    393
  • Rating
    Clean
  • Copyright
    © Credit Union Exam Solutions

You Might Also Like