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The Federal Financial Institutions Examination Council (FFIEC), of which the NCUA and CFPB are members, last week provided an update on its project to identify and assess ways to improve the effectiveness, efficiency and quality of examination processes to reduce the regulatory burden on community financial institutions.

NAFCU has advocated for various improvements to credit unions' examination processes, including for the NCUA to return to an 18-month exam cycle for all healthy credit unions — NAFCU supported the agency's decision to extend its exam cycles for credit unions $1 billion and below, effective Jan. 1, 2017. The NCUA has also adopted recommendations from its Exam Flexibility Initiative, which include better coordinating exams with state supervisors, enhancing planning and notice procedures and reducing its onsite examination presence.

NAFCU is supportive of bipartisan legislation that would set standards for examination fairness for federal financial institution regulators, including the NCUA, including clear guidance from regulators, consistency from exam to exam, timeliness of reported exam results and an independent appeals process free of examiner retaliation.

The FFIEC's Examination Modernization Project is focused on four areas that members believe have the potential for the most meaningful supervisory burden reduction, including:

• regulator communication objectives before, during and after examinations;
• use of technology and shifting examinations from onsite to offsite when appropriate;
• tailored examinations based on risk; and
• electronic file transfer systems to facilitate secure information exchanges between institutions and examiners or supervisory offices.

More information about the FFIEC's project is available here.