www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/ Safety and soundness has been referred to in examinations from here to eternity, and until now nobody could tell you where it was defined. The FDIC and the OCC have finalized a rule that puts a definition on “unsafe or unsound practice” for the first time, for both enforcement actions under 12 USC 1818 and supervisory activities. NCUA did not join.Mark Treichel is joined by Steve Farrar and Todd Miller of Credit Union Exam Solutions to work through what the rule actually says, why it reads a great deal like a section buried in NCUA’s own National Supervision Policy Manual, and what credit unions should take from a rule that does not apply to them.Steve Farrar spent the first part of his NCUA career in the field, predominantly as a problem case officer working conservatorships, liquidations, and assisted mergers. He then spent fifteen years in the central office in the Division of Risk Management, training examiners in problem resolution and working on the enforcement manual and risk-based capital, and finished as a vice president of the Central Liquidity Facility. Todd Miller spent 34 years at NCUA — fourteen as a problem case officer and examiner in the Western Region, a decade as a regional capital markets specialist with a hand in writing much of the agency’s interest rate risk and liquidity policy, and another decade as a director of special actions supervising problem case officers and regional specialists.The conversation covers where unsafe and unsound actually lives in the Federal Credit Union Act and in Part 741, the two-part test in the final rule, the shift from “merely possible” to “likely,” the exclusion of reputation risk that is not tied to financial condition, the tailoring provision that forces a directive to get more specific as potential losses grow, the two changes between the proposal and the final rule, and the new supervisory observations category that lets examiners share expertise without creating a requirement that goes to the board. It closes with Todd reading NCUA’s DOR criteria straight out of the NSPM — which, as he points out, rhymes.

www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ Safety and soundness has been referred to in examinations from here to eternity, and until now nobody could tell you where it was defined. The FDIC and the OCC have finalized a rule that puts a definition on “unsafe or unsound practice” for the first time, for both enforcement actions under 12 USC 1818 and supervisory activities. NCUA did not join. Mark Treichel is joined by Steve Farrar and Todd Miller of Credit Union Exam Solutions to work through what the rule actually says, why it reads a great deal like a section buried in NCUA’s own National Supervision Policy Manual, and what credit unions should take from a rule that does not apply to them. Steve Farrar spent the first part of his NCUA career in the field, predominantly as a problem case officer working conservatorships, liquidations, and assisted mergers. He then spent fifteen years in the central office in the Division of Risk Management, training examiners in problem resolution and working on the enforcement manual and risk-based capital, and finished as a vice president of the Central Liquidity Facility. Todd Miller spent 34 years at NCUA — fourteen as a problem case officer and examiner in the Western Region, a decade as a regional capital markets specialist with a hand in writing much of the agency’s interest rate risk and liquidity policy, and another decade as a director of special actions supervising problem case officers and regional specialists. The conversation covers where unsafe and unsound actually lives in the Federal Credit Union Act and in Part 741, the two-part test in the final rule, the shift from “merely possible” to “likely,” the exclusion of reputation risk that is not tied to financial condition, the tailoring provision that forces a directive to get more specific as potential losses grow, the two changes between the proposal and the final rule, and the new supervisory observations category that lets examiners share expertise without creating a requirement that goes to the board. It closes with Todd reading NCUA’s DOR criteria straight out of the NSPM — which, as he points out, rhymes.

FDIC and OCC Define Safety and Sound & What Credit Unions Should Take From It

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/ NCUA started sending a rewritten exam entry letter to credit union CEOs in late July and early August. It is not a formatting change. For the first time, the letter states what the exam is actually about.Mark Treichel is joined by Todd Miller and Steve Farrar of Credit Union Exam Solutions to go through the new template line by line and compare it against the one it replaced.The old template did not define or limit the substantive focus of the exam. Scope was whatever the exam team decided it was. The new template says the exam will focus on safety and soundness, significant compliance with applicable laws and regulations, and whether there is material financial risk. Steve traces that phrase across all three federal banking regulators and back to the Silicon Valley Bank failure. Todd points out that "material" is not defined by NCUA or anyone else, and that you can drive a truck through the barn door of what counts.Underneath all of it is staffing. Todd puts NCUA’s reduction at 27 percent and the FDIC’s at roughly a third. Examiners are playing triage, and the letter is the agency telling them what to stop looking at.The conversation covers what the letter now makes explicit that used to live as an unwritten rule in the national supervisory policy manual — including that examiners are supposed to work with management on corrective actions before the DOR is drafted, and that supplementary facts and informal discussion items are not actionable concerns. Todd’s read is that this took a tool away from examiners. Mark’s read is that the pressure does not disappear — it moves into supplementary facts, into the scope workbook, and into the close section the credit union never sees.Also covered: why compensation, vendor contracts, and pricing being off limits sits badly next to a decade of third-party due diligence pressure, and why it costs small credit unions the most; the mandatory exit meeting; the codified right to record joint conferences and exit meetings, and why recordings matter on appeal; VPN access and the two-week notice; CUSO records; direct examiner contact with external auditors; and the disappearance of unencrypted media and chain-of-custody transfers.Steve closes with a practical checklist for the day the letter lands: name the point person, resolve ambiguous requests before you upload anything, ask for extensions early and say why, and put someone on version control.

www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ NCUA started sending a rewritten exam entry letter to credit union CEOs in late July and early August. It is not a formatting change. For the first time, the letter states what the exam is actually about. Mark Treichel is joined by Todd Miller and Steve Farrar of Credit Union Exam Solutions to go through the new template line by line and compare it against the one it replaced. The old template did not define or limit the substantive focus of the exam. Scope was whatever the exam team decided it was. The new template says the exam will focus on safety and soundness, significant compliance with applicable laws and regulations, and whether there is material financial risk. Steve traces that phrase across all three federal banking regulators and back to the Silicon Valley Bank failure. Todd points out that "material" is not defined by NCUA or anyone else, and that you can drive a truck through the barn door of what counts. Underneath all of it is staffing. Todd puts NCUA’s reduction at 27 percent and the FDIC’s at roughly a third. Examiners are playing triage, and the letter is the agency telling them what to stop looking at. The conversation covers what the letter now makes explicit that used to live as an unwritten rule in the national supervisory policy manual — including that examiners are supposed to work with management on corrective actions before the DOR is drafted, and that supplementary facts and informal discussion items are not actionable concerns. Todd’s read is that this took a tool away from examiners. Mark’s read is that the pressure does not disappear — it moves into supplementary facts, into the scope workbook, and into the close section the credit union never sees. Also covered: why compensation, vendor contracts, and pricing being off limits sits badly next to a decade of third-party due diligence pressure, and why it costs small credit unions the most; the mandatory exit meeting; the codified right to record joint conferences and exit meetings, and why recordings matter on appeal; VPN access and the two-week notice; CUSO records; direct examiner contact with external auditors; and the disappearance of unencrypted media and chain-of-custody transfers. Steve closes with a practical checklist for the day the letter lands: name the point person, resolve ambiguous requests before you upload anything, ask for extensions early and say why, and put someone on version control.

NCUA's New Exam Entry Letter: What Changed and What It Means for Your Exam

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/ Recorded August 30. A short episode looking ahead at the last four months of the year, plus one development worth flagging now.NCUA sent out a letter on how the exam process is going to work this coming cycle. It went to credit union CEOs. It was not posted on NCUA’s website. Mark has a copy and will cover it in an upcoming episode with Steve Farrar and Todd Miller of the Credit Union Exam Solutions team.An attorney pointed out that an item on bylaws went out the same way — to CEOs, not listed online. That’s two communications in short order that credit unions received directly and that the public record does not reflect. Mark has thoughts on why NCUA may be handling it that way. He does not agree with it.Also in this episode: the FDIC and OCC’s new final rule on safety and soundness and whether NCUA needs one of its own; what is likely to land on NCUA’s agenda in the remaining four months; a coming episode on ten things a new chairman should do for clarity and sunshine; the ex-regulator panel of John McKechnie, Geoff Bacino, and Alonzo Swann returning in the fourth quarter, probably after John Crews’s first board meeting; the Inspector General’s report to Congress; and new YouTube shorts that will not appear on the podcast feed.

www.marktreichel.com https://www.linkedin.com/in/mark-treichel/ Recorded August 30. A short episode looking ahead at the last four months of the year, plus one development worth flagging now. NCUA sent out a letter on how the exam process is going to work this coming cycle. It went to credit union CEOs. It was not posted on NCUA’s website. Mark has a copy and will cover it in an upcoming episode with Steve Farrar and Todd Miller of the Credit Union Exam Solutions team. An attorney pointed out that an item on bylaws went out the same way — to CEOs, not listed online. That’s two communications in short order that credit unions received directly and that the public record does not reflect. Mark has thoughts on why NCUA may be handling it that way. He does not agree with it. Also in this episode: the FDIC and OCC’s new final rule on safety and soundness and whether NCUA needs one of its own; what is likely to land on NCUA’s agenda in the remaining four months; a coming episode on ten things a new chairman should do for clarity and sunshine; the ex-regulator panel of John McKechnie, Geoff Bacino, and Alonzo Swann returning in the fourth quarter, probably after John Crews’s first board meeting; the Inspector General’s report to Congress; and new YouTube shorts that will not appear on the podcast feed.

What’s Coming This Fall: Exam Letters, Bylaws, and a Rule NCUA Might Need

Coming Soon!  Credit Union Exam Solutions.

Coming Soon! Credit Union Exam Solutions.

Coming Soon!&nbsp; Credit Union Exam Solutions.

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

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

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