Stress Testing and NCUA

Any federally-insured credit union with over $10 billion in assets is required by the National Credit Union Administration (NCUA) to undergo stress testing.

However, responding to questions from Representative Randy Neugebauer (R-TX) -- Chairman of the Subcommittee on Financial Institutions and Consumer Credit -- about the agency's stress test, NCUA Chairman Debbie Matz stated that agency does not have the calculation capacity to run stress test and NCUA lacks access to industry performance data that drives projected performance results.

Matz did acknowledge that NCUA staff have experience in conducting stress tests and are capable of supervising the stress testing process.

But Matz wrote that for NCUA to conduct the stress test, the agency would need to hire additional staff and procure industry performance data and analytical software, which would have been prohibitively costly.

Accordingly, the agency contracted with BlackRock Solutions to conduct the stress test. Chairman Matz stated that it cost the National Credit Union Share Insurance Fund $2.3 million in 2014 and $1.7 million in 2015.

The questions and answers are part of the hearing record on National Credit Union Administration Operations and Budget (July 23, 2015).