Mark Treichel sits down with Steve Farrar and Todd Miller to break down Letters of Understanding and Agreement—NCUA's formal enforcement tool that requires board-level commitment. With over 100 combined years of NCUA experience, including Steve's authorship of NCUA's enforcement manual, this episode delivers insider perspective on what LUAs mean for credit unions, how boards should approach them, and critical mistakes to avoid.

Key Topics Covered

What triggers an LUA: Understanding when NCUA escalates from informal actions to formal enforcement, and why most credit unions receiving LUAs are classified as troubled.

Published vs. unpublished: The distinction that creates reputation risk, how industry publications find published LUAs, and which state regulators require publication.

Board accountability: Why voting no or abstaining doesn't protect individual directors, and what fiduciary responsibility means when your credit union signs an LUA.

Negotiation before signing: How to approach discussions with your examiner or problem case officer, ensuring timeframes are realistic and commitments are achievable.

Root causes vs. comprehensive lists: Why LUAs should focus on fundamental problems, and what to do when you're facing a lengthy document with dozens of items.

Satisfying an LUA: The two-part test NCUA applies—completing actions AND achieving intended results—and why there's no built-in expiration date.

Notable Quotes

"The LUAs only addressed mainly what we would refer to as the root causes of the problem." — Steve Farrar

"The language in published LUAs is very draconian and very one-sided. It's intended to be serious." — Todd Miller

"If you abstain or vote no, and the board agrees to sign, you're still subject to that agreement. It was a board decision." — Mark Treichel

About the Guests

Steve Farrar spent 30+ years at NCUA, including 15 years as a problem case officer and 15 years in the central office where he authored NCUA's enforcement manual and worked on corporate resolution and risk-based capital regulations.

Todd Miller served nearly 35 years at NCUA as an examiner, problem case officer, regional capital market specialist, and Director of Special Actions supervising problem case officers and capital market specialists.

Resources

Credit Union Exam Solutions: marktreichel.com

Related Episode: Documents of Resolution and Examiner Findings

Episode Title: It's Never as Bad as You Think: Suicide, Fraud, and the Stories I've Never Told

Content Warning: This episode discusses suicide. If you or someone you know is struggling, please call or text 988 (Suicide & Crisis Lifeline).

Episode Description: The death of 25-year-old Vikings wide receiver Rondale Moore this weekend brought back memories Mark has never shared publicly. In 33 years at NCUA — including 8 years as Executive Director — Mark encountered two individuals who took their own lives after embezzling from their credit unions. In this solo episode with no intro music, Mark tells those stories for the first time and delivers three messages to anyone in the credit union industry who may be carrying a secret they think will destroy their life.

In This Episode:

• How the Rondale Moore story and Hollywood Brown's tweet triggered this episode
• Mark's first encounter with suicide at age 19
• A Midwest credit union CEO whose "hunting accident" wasn't accidental
• The connection between Dead Poets Society and an examination Mark will never forget
• An East Coast treasurer who jumped from a high-rise rather than face conservatorship
• Three core messages: it's never as bad as you think, there's always a way back, and you will get caught
• What credit union leaders can do to pay attention to the people, not just the numbers

Resources:

• 988 Suicide & Crisis Lifeline — call or text 988
• American Foundation for Suicide Prevention — afsp.org

Hat tip: Matthew Coller and The Purple Insider podcast for the Rondale Moore episode that pushed Mark to finally record this.

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

Episode Description: When your credit union receives an examination result you believe is wrong, what are your options? In this episode, Mark Treichel walks through NCUA's formal appeal process from start to finish — the timeline, the levels of review, what you can actually appeal, and how to think about whether it makes sense for your institution. Drawing on his experience as a former NCUA regional director and his work advising credit unions through the process, Mark breaks down the practical realities most credit union leaders don't fully understand until they're in the middle of it.

Key Topics Covered:

• Why resolving issues at the examiner level is always the best first step — and why it doesn't always work
• The fear of retaliation and when it's worth pushing back anyway
• What qualifies as a "material supervisory determination" under Part 746
• The critical phrase most credit unions overlook: "includes, but is not limited to"
• Why you can't formally appeal CAMEL components — but effectively can anyway
• Document resolutions are negotiable: pushing back on language, dates, and requirements
• The full appeal timeline: regional director, Supervisory Review Committee, and NCUA Board
• When oral hearings are available and when they're guaranteed
• Why "tie goes to the runner" at every level — and what that means for your burden of proof
• Defining victory: full reversals, partial wins, and the value of being heard
• Building your administrative record for the long term

Key Takeaways:

1. You have 30 days from the final exam to appeal to the regional director — and some argue the clock starts when you see the draft.
2. A full appeal through the NCUA Board can take eight months to a year.
3. The Supervisory Review Committee must grant an oral hearing if you request one — the only level where that's guaranteed.
4. Your odds of success generally improve as you move higher in the process.
5. Even if you don't win the appeal, you're building an administrative record NCUA must consider in any future enforcement actions.

Resources:

• NCUA Part 746, Subpart A (Appeals Regulation)
• Preamble to the final rule on appeals process
• Credit Union Exam Solutions: marktreichel.com

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The NCUA has issued a proposed rule implementing the GENIUS Act, establishing a federal licensing framework for payment stablecoin issuers.

For the first time, credit union subsidiaries could apply to become Permitted Payment Stablecoin Issuers (PPSIs) — but only under strict supervisory standards.

In this episode, Mark breaks down:

• Why credit unions cannot issue stablecoins directly
• How the subsidiary licensing model works
• The 10% “Parent Company” threshold and joint application structure
• The 1% CUSO investment cap and its impact on participation
• The 120-day statutory decision clock
• How this compares to FDIC, OCC, and Federal Reserve proposals
• Why “rewards vs. interest” could become the next regulatory battleground
• How the proposed CLARITY Act fits into the broader digital asset framework

This proposal represents one of the most significant expansions of NCUA supervisory authority in decades. While stablecoin issuance is optional, the regulatory guardrails are now taking shape.

Comments on the proposed rule are due 60 days after Federal Register publication.

If your credit union is considering digital asset innovation, payment modernization, or cooperative technology ventures, this episode outlines the strategic considerations.

Key Topics

• GENIUS Act stablecoin framework
• Subsidiary-only issuance requirement
• PPSI licensing process
• Capital and liquidity expectations
• CUSO structure implications
• Joint ownership models
• Regulatory cost recovery debate
• CLARITY Act market structure considerations

Why This Matters

Stablecoins are not insured shares.
 They are not backed by the full faith and credit of the United States.
 They cannot blur the line between payments and deposits.

Understanding these distinctions will be critical as the industry evaluates next steps.

If you found this episode helpful, share it with a colleague and subscribe to With Flying Colors for ongoing insights into NCUA policy, supervision trends, and regulatory strategy.

In this special archive episode of With Flying Colors, Mark Treichel is joined by Steve Farr and Todd Miller — both former NCUA leaders — to revisit a foundational topic that continues to shape credit union supervision today: risk appetite, risk culture, and concentration risk.

While regulators often emphasize capital levels, history shows that capital alone cannot offset poor risk governance. This conversation explores why concentration risk continues to challenge institutions — even those that appear well capitalized.

Drawing on decades of regulatory experience, the team walks through the core components of a modern risk management framework and discusses how boards should think about oversight in today’s environment.

What We Cover

🔹 Risk Culture Starts at the Top

• Why tone from the board and CEO matters more than policies
• How troubled institutions often trace back to cultural breakdowns
• The board’s role in defining acceptable risk

🔹 Risk Appetite: Limit or Goal?

• What a risk appetite statement actually means
• Why limits must be measurable and monitored
• The difference between qualitative intent and quantitative control

🔹 Concentration Risk in the Real World

• The taxi medallion example and what it taught the industry
• Why 15%+ capital ratios were not enough
• How concentration risk interacts with capital and stress scenarios

🔹 The Three Lines of Defense

• Frontline business units
• Risk management oversight (including the Chief Risk Officer role)
• Internal audit and supervisory committee functions

🔹 Examiner Expectations Today

• Stress testing and concentration limits
• Supporting board-approved limits with data
• What happens when limits are breached
• Why documentation and reporting matter

Key Takeaways

• Capital can absorb losses — but it cannot fix poor diversification.
• Risk appetite should reflect capital strength, strategic goals, and institutional complexity.
• Concentration limits are not aspirational targets — they are guardrails.
• Effective risk management requires culture, measurement, and accountability.

Why This Still Matters

Regulatory guidance continues to evolve, but the core principles of risk governance remain unchanged. Whether you lead a $300 million credit union or a multi-billion-dollar institution, understanding how risk culture, appetite, and oversight interact is essential.

This archive episode remains highly relevant as examiners increasingly scrutinize concentration risk and enterprise risk management practices.

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

In this episode of With Flying Colors, Mark Treichel is joined by former NCUA leaders Geoff Bacino, Alonzo Swann, and John McKechnie for a timely and candid discussion about Chairman Kyle Hauptman’s appointment to the Public Company Accounting Oversight Board (PCAOB) — and what it signals for the future of the NCUA.

While the announcement appears straightforward, the panel explains why it creates a ripple effect across the agency, including questions about leadership continuity, pending lawsuits, board vacancies, staff reductions, and the broader stability of the regulator at a critical time for credit unions.

This conversation goes beyond speculation and into how the agency actually functions when leadership is in flux — from delegation of authority to examiner operations to internal morale.

You’ll hear insider perspective on:

• Why Hauptman’s “intent to remain” language matters
• How the Slaughter/Harper lawsuits could determine the shape of the future board
• What a one-member board means in practice
• Why notation votes and lack of public discussion are becoming a concern
• The real impact of a 27% staff reduction at NCUA
• How agency expertise gaps are affecting morale and operations
• The upcoming interest rate ceiling decision and why it may be politically sensitive
• Why the agency may be “running itself” more than people realize
• What happens if the Supreme Court changes how independent boards operate
• Predictions on who may replace Hauptman and what that means for credit unions

The panel also discusses how political dynamics, Senate control, and White House strategy could shape the next NCUA board in ways credit unions haven’t seen before.

Despite the uncertainty, one theme is clear: the blocking and tackling of supervision continues, but major structural decisions are happening quietly beneath the surface.

This episode is essential listening for anyone trying to understand where NCUA is headed in 2026.

👥 Guests

• Geoff Bacino – Former NCUA Board Member
• Alonzo Swann – Former NCUA Regional Director
• John McKechnie – Washington, DC credit union advocate and consultant

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

Chairman Hauptman’s Statement on Appointment to PCAOB

ALEXANDRIA, VA (January 30, 2026) – National Credit Union Administration Chairman Kyle S. Hauptman issued the following statement after being named as a member of the Public Company Accounting Oversight Board (PCAOB).

“I am grateful to President Donald J. Trump and Chairman Paul S. Atkins for their faith in me and for the appointment to the PCAOB,” said Chairman Hauptman. “I intend to remain in my role as NCUA Chairman until my successor is appointed by President Trump and confirmed by the U.S. Senate.”

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

In this episode of With Flying Colors, Mark Treichel is joined by former NCUA senior leaders Todd Miller and Steve Farrar for a deep dive into NCUA’s 2026 Supervisory Priorities Letter — and what it means in the real world for credit unions heading into the next exam cycle. 
Deep Dive on NCUA Priority Lett…

With significant staffing reductions at the agency and a shift toward more “risk-based” supervision, the group discusses whether exam programs will truly become more tailored — or whether credit unions should expect more conservative ratings, more findings, and less dialogue.

The conversation also explores what’s emphasized, what’s missing, and how operational realities inside NCUA may shape supervision more than policy statements.

Key Topics Discussed

🏛️ NCUA Operations and Staffing

• How a 27% reduction in staff could affect exam consistency and depth
• Why less-experienced exam teams may lead to more conservative CAMEL ratings
• Concerns about “CYA supervision” and addressing symptoms rather than root causes

📊 Balance Sheet Management and Credit Risk

• Why industry data does not support claims of worsening asset quality
• Continued focus on credit concentrations and underwriting practices
• What outsourcing of lending and collections may trigger in exams

💧 Liquidity and Interest Rate Risk

• Why interest rate risk is often overstated as a failure driver
• Ongoing scrutiny of liquidity forecasting models
• Growing competition for deposits from fintechs and non-banks

💵 Earnings, Capital, and Rising Expenses

• Why operating expenses are growing faster at credit unions than banks
• Technology investments, staffing costs, and post-COVID catch-up spending
• Capital planning expectations despite fewer references in the priority letter

⚙️ Operational Risk, Payments, and Technology

• Increasing complexity of payment platforms and third-party integrations
• Why internal audit functions matter more than ever
• Risks created by rapid fintech adoption

🕵️ Fraud Prevention and Member Protection

• AI-driven fraud and voice spoofing risks
• Why protecting members is now as critical as protecting institutions
• Reputation risk from scams and social media amplification

📋 Compliance and What’s Missing

• Notable reduction in consumer compliance emphasis
• BSA remains a regulatory constant
• What the absence of certain topics may signal about regulatory priorities

🎙️ Practical Exam Strategy

• Why recording exit conferences can protect credit unions
• How appeals and documentation can matter more in constrained environments

Why This Episode Matters

NCUA’s priority letters set expectations — but exam outcomes are often shaped by staffing, experience, and regional risk perceptions. As the agency continues to restructure, understanding how policy meets practice has never been more important.

This episode offers insider perspective on:

• How exam approaches may shift in 2026
• Where credit unions should expect closer scrutiny
• Why communication and documentation will matter more than ever

In this emergency update of With Flying Colors, Mark breaks down a newly proposed NCUA rule that could meaningfully reduce barriers to serving on a federal credit union board.

The proposal would allow federal credit unions to reimburse or directly pay reasonable dependent care costs for volunteer officials when those costs are incurred while attending board meetings or performing official duties — including, potentially, training and conferences.

This is a narrow but important change that reflects rising childcare and eldercare costs, declining volunteerism, and the increasing demands placed on credit union boards.

Mark also shares brief updates on the Central Liquidity Facility (CLF), NCUA’s regulatory simplification efforts, and what’s coming next on the podcast following recent discussions at a credit union conference cruise.

🔍 What the Proposed Rule Would Do

• Applies to federal credit unions only (state charters follow state law)
• Allows reimbursement or direct payment of:
  • Childcare
  • Adult dependent care (elder care, disabled dependents)
• Covers costs incurred while:
  • Attending board meetings
  • Performing official duties (which may include training and conferences)
• Applies only to volunteer officials, not paid executives

🚫 What the Rule Does Not Do

• Does not allow reimbursement for:
  • Lost wages
  • Paid leave
  • Indirect costs of volunteering
• Does not change compensation rules under the Federal Credit Union Act
• Does not require credit unions to reimburse these costs — policies remain optional and discretionary
• Does not change IRS tax treatment — consult tax professionals for reporting requirements

💡 Why This Matters

• Childcare costs have increased more than 200% since 1990
• Volunteer participation has declined significantly since pre-pandemic levels
• Federal credit union boards:
  • Must meet at least 12 times per year
  • Cannot generally be compensated
• This proposal may help:
  • Attract younger and working-age professionals
  • Support caregivers and single parents
  • Improve diversity of experience and perspective on boards

🧭 What NCUA Is Asking for Public Comment On

NCUA is inviting industry feedback on:

• Whether reimbursement should be limited to temporary or incremental costs
• Whether training and conference travel should clearly qualify as official duties
• Documentation and internal control standards
• Best practices from state-chartered credit unions

Credit unions and board members are encouraged to submit comments during the open comment period.

🔜 What’s Coming Next on the Podcast

• A follow-up episode with Mark’s team discussing:
  • NCUA’s 2025 Supervisory Priorities Letter
  • What it really means for exams and operations
• Coverage of NCUA’s upcoming webinar on supervisory priorities (February 19)
• Continued “emergency update” episodes when time-sensitive issues break

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

In this special preview episode of With Flying Colors, Mark Treichel tees up an upcoming live, on-stage discussion from the Florida Q’s Cruise with team members Steve Farr and Todd Miller.

Just days before the cruise, NCUA released its 2026 Supervisory Priorities Letter, and as always, that letter gives us important clues about what examiners will be focused on in the year ahead — and just as importantly, what’s driving examiner behavior behind the scenes.

This episode serves as a primer for the deeper, post-cruise discussion, where we’ll incorporate real-time feedback and questions from credit union leaders attending the cruise.

🧭 Big Picture Theme: NCUA in Chaos

Before diving into technical priorities, Mark frames the conversation around what many credit unions are experiencing operationally:

• Leadership instability and fewer board actions
• Retirements, buyouts, and staffing losses
• Revolving and often less-experienced examiners
• Exams prioritized over approvals and strategic requests

Bottom line:

📌 What’s in the 2026 Supervisory Priorities Letter?

Mark walks through the major categories NCUA highlighted and why they matter:

🟦 Lending / Credit Risk

• Delinquencies and charge-offs at decade highs
• Focus on underwriting, concentrations, and workouts
• Continued scrutiny of commercial real estate and indirect lending

🟦 Liquidity & Interest Rate Risk

• Stress testing assumptions under closer review
• Structural liquidity constraints getting more attention
• Alignment between balance sheet strategy and risk appetite

🟦 Earnings & Capital Adequacy

• Sustainability of earnings under stress scenarios
• Capital planning tied directly to risk profiles
• More forward-looking analysis expected in exams

🟦 Payment Systems (Back as a Headline Topic)

• Real-time payments and complex integrations
• Vendor risk, data exposure, and cyber vulnerabilities
• Governance and internal controls over payments ecosystems

🟦 Fraud Prevention and Detection

• Internal controls and separation of duties
• Insider abuse explicitly called out
• Exam procedures being updated to reflect evolving fraud risks

🟦 BSA / AML Compliance Risk Management

• Shift away from broad consumer compliance narrative
• Stronger focus on risk-based AML programs
• Programs must be tailored to actual institutional risk

🔄 What’s Notably Different from Prior Years?

Mark also highlights important shifts compared to earlier supervisory letters:

• Cybersecurity is no longer a standalone headline — now embedded in Operational Risk and Payments
• Consumer financial protection is not emphasized as a top category
• Fraud and payment systems return after being absent for several years
• Governance expectations are increasingly embedded in every risk area

These changes align with what many credit unions are already experiencing in exams — more findings tied to process, oversight, and documentation, not just numbers.

🎤 What’s Coming After the Cruise

During the Florida Q’s Cruise, Mark, Steve, and Todd will be discussing:

• What credit unions are actually seeing in recent exams
• Where examiner expectations are rising fastest
• How governance findings are being framed
• What boards should be asking management right now
• How to manage regulatory uncertainty proactively

After the cruise, a full follow-up episode will bring those insights back to the broader audience.

🎯 Key Takeaway

The risks themselves haven’t changed dramatically — but NCUA’s capacity, processes, and delivery of supervision have.

Credit unions that adapt their governance, documentation, and strategic planning to that reality will be better positioned to manage both exam outcomes and approval delays in 2026 and beyond.