[co-author: Jennifer Aguilar]
On January 14, 2021, the NCUA and CFPB announced the agencies have entered into a memorandum of understanding relating to their joint supervision of federally insured credit unions over $10 billion in assets. The MOU seeks to “improve coordination, cooperation, and efficiency generally, and to reduce the burden to institutions and examination staff” by proactively sharing information and coordinating on examinations. The MOU adds to the current collaboration framework and does not replace existing MOUs between the agencies and state regulators.
In the MOU, the agencies agree to collaborate on examinations as follows:
- In accordance with a 2012 MOU, the agencies will continue to share relevant supervisory information, including request letters and examination reports, through electronic means. The agencies will also establish a working group to develop a process for sharing information securely.
- The agencies will share examination schedules with each other and with each other’s regional offices annually, and where there is overlap in subject matter areas for review, the agencies will coordinate examination activities to the extent possible.
- The agencies’ supervision and enforcement staff will meet semiannually to review possible actions and resolve any conflicts with regard to what constitutes compliance and the appropriate remedy for noncompliance. If one agency has already reviewed a matter being considered by the other agency for possible enforcement action and found no violation or imposed a supervisory remedy, staff will ensure agency leadership is aware of the potential conflict before proceeding with the action.
- Each agency will notify the other of any action or suit at least two days in advance.
The agencies also agreed to certain administrative steps to improve collaboration processes and understanding of the regulatory environment. The agencies will meet semiannually to discuss supervision strategy and identify opportunities for coordination. The chief data officers from each agency will also meet semiannually to facilitate information sharing and data management. At least annually, the agencies will also share training materials and each agency will make its training programs available to the other agency’s staff. Beginning in 2022, the agencies will hold at least one training per year on a topic of mutual interest.
The agencies also agreed to further discussion on potentially sharing the data collected from the voluntary diversity self-assessment.
While this MOU is another step in the right direction for more proactive collaboration between the NCUA and CFPB, larger credit unions preparing for CFPB oversight are still faced with the numerous challenges of interacting with an unknown regulator. Ballard Spahr’s consumer finance team is experienced with the CFPB’s expectations and supervisory process. We help clients prepare for examinations in advance by assessing their compliance management systems, identifying areas of compliance risk, and conducting substantive reviews similar to an examination. During an examination, we can assist in responding to exam inquiries and organizing a presentation. If the $10 billion mark is within sight at your credit union, let our team help you prepare for the CFPB.