Stronger Supervision of Credit Unions Needed

GGD-83-12: Published: Oct 6, 1982. Publicly Released: Oct 6, 1982.

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GAO reported on National Credit Union Administration (NCUA) efforts to supervise both federal credit unions and, in shared responsibility with the states, federally insured state credit unions.

GAO found that NCUA has used examination reports prepared by state regulatory agencies to assess the initial and continued insurability of federally insured state credit unions and, until recently, has conducted few direct examinations of state credit unions. Although NCUA has placed considerable reliance on these reports, the absence of criteria has hampered a consistent evaluation of state programs. NCUA insurance analysts review and monitor the condition of federally insured state credit unions. Because the analysts have little guidance to help them to determine the appropriate course of action to be followed in dealing with both the state agencies and state credit unions, GAO found that different approaches are used in dealing with problem cases within each region and from state to state.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The NCUA Board should develop standards and guidelines for regional staff to assess the reliability of State examination data.

    Agency Affected: National Credit Union Administration

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The NCUA Board should establish a process whereby NCUA can monitor future changes in the State examination programs.

    Agency Affected: National Credit Union Administration

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The NCUA Board should initiate and complete a comprehensive study of State examination programs which includes standards by which the acceptability of the various State programs can be measured.

    Agency Affected: National Credit Union Administration

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The NCUA Board should direct that problem credit unions be properly classified and institute periodic reviews to ensure that ratings are properly assigned and reflect the credit unions' conditions.

    Agency Affected: National Credit Union Administration

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The NCUA Board should clarify for regional personnel the purpose and circumstances for which preliminary warning letters and administrative actions should be used, including guidance as to when mild actions should be replaced by stronger ones.

    Agency Affected: National Credit Union Administration

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The NCUA Board should develop guidelines for regional staff regarding actions which should be taken to monitor problem State credit unions and to determine when Federal intervention is necessary.

    Agency Affected: National Credit Union Administration

 

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