On Compliance: New call reports, exam tool and risk-based capital rule herald new era

NCUA’s modernization efforts should reduce both financial and political risks to the credit union system.

by Michael S. Edwards, CU Management

This spring marks the beginning of a new era in the National Credit Union Administration’s approach to call reporting, compliance examinations and regulatory capital for federally insured credit unions. These changes should help strengthen the American credit union system.

Significant changes are taking effect with the March 2022 Call Report and credit unions’ examinations will start being conducted using the Modern Examination & Risk Identification Tool, or “MERIT.” In addition, NCUA’s Risk-Based Capital Rule and Complex Credit Union Leverage Ratio are now effective, making natural-person, federally insured credit unions with more than $500 million in assets subject to Basel Framework risk-based capital rules for the first time, similar to how banks are regulated.

These NCUA supervisory modernization efforts should reduce both financial and political risks to the credit union system.

 

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