Semi-Annual Call Reports Are At Odds With An Extended Exam Cycle

Some comment letters regarding the National Credit Union Administration (NCUA) Call Report Modernization proposal are calling for the NCUA to allow some credit unions to file their call reports semi-annually. The recommendations included some combination of asset size with risk profile.

For example,

• The Credit Union National Association advocated for eliminating odd-quarter reporting for any credit union below the $50 million asset thresholds that report a net worth ratio above 10 percent.
• Credit Union of Vermont (Rutland, VT) recommended "semi-annual filings of call reports for low risk credit unions."
• FIG FCU requested that credit unions with strong net worth ratios be allowed to submit call reports semi-annually.
• Stuart Lynn wrote that credit unions with CAMEL ratings of 1 - 3 should be required to submit their call reports semi-annually. This recommendation will not take place, as it would divulge information about credit unions that are a problem institutions.

However, these recommendations for less frequent filing of call reports are a step backward.

Prior to July 1, 2002, only credit unions with excess of $50 million in assets were required to submit quarterly call reports. In requiring credit unions to file quarterly call reports, the NCUA Board stated in 2002 that the quarterly filings of call reports were a necessary component of its risk-focused examinations and extending the examination cycle. NCUA believed that the benefits from an extended examination cycle outweigh the costs of filing two additional call reports per year.

Clearly, less frequent filing of call reports are at odds with extending the examination cycle.