Exam Procedures

Examiners review compliance with certain consumer financial protection regulations during an examination as required by the current version of Instruction 5000.20, Examination Scope.

A credit union’s compliance risk profile can change rapidly because of new products and services, regulatory changes, competitive pressures, field of membership expansion, and the evolution of information technology.

Examiners identify the level of risk inherent in a credit union's consumer financial protection compliance activities by evaluating:

  • The complexity of operations

  • Management’s level of due diligence regarding compliance issues for existing, new, and proposed products and services

  • The extent to which management devotes resources to compliance

Exam staff may request, through their supervisor, an SME’s participation on a particular examination. This request is generally made during the planning process. Requesting a consumer compliance SME may be appropriate when:

  • An examiner determines that a high risk exists

  • A large, complex credit union has substantial consumer financial protection compliance exposure

  • A credit union has not received a consumer financial protection compliance review for several examinations

Examiners must balance their request for resources with existing and emerging risks. Staff should focus on the operational areas in which compliance errors present the greatest potential risk to consumers.

To guide a review, exam staff can refer to the Federal Consumer Financial Protection Guide, which includes examination procedures and compliance checklists covering most consumer financial protection regulations for which NCUA has enforcement authority. Guidance for both credit unions and exam staff is also online in the NCUA’s Consumer Compliance Regulatory Resources.

Examiners are not expected to perform in-depth reviews of each consumer financial protection regulation at every examination. Rather, examiners should review the most recent version of the NCUA Instruction 5000.20, Examination Scope, and base their reviews on current consumer financial protection areas of focus, given existing and emerging risks in the industry and individual credit union risk exposures. Examiners have the flexibility to add additional review areas to their scope based on risk. See the Expanding the Scope for a Risk-Focused Examination topic for details.

The purpose of an examination of consumer financial protection compliance is to determine whether a credit union:

  • Complies with consumer financial protection laws and regulations

  • Protects consumers from violations of their rights

  • Initiates timely corrective action when it becomes aware of consumer financial protection compliance violations

Expanding the Scope for a Risk-Focused Examination

Factors that may lead an examiner to expand the examination scope of an RFE include:

  • A credit union introduced new products or services that fall under a consumer financial protection law or regulation

  • New consumer financial protection compliance laws and regulations were passed, which affect the credit union industry

  • Credit union staff responsible for compliance with consumer financial protection laws and regulations have changed

  • An extended time has passed since an NCUA examiner last reviewed the area

  • The volume or severity of member complaints is significant

  • A credit union has a history of violations, violations creating consumer financial harm, or a level of violations indicating compliance management problems.

  • Current or pending litigation caused by consumer financial protection compliance issues exists

Before expanding the examination scope, an examiner may consult with a Consumer Compliance SME, SE, Regional DOS, or NCUA's OCFP for additional guidance.

If examiners note CMS weaknesses creating concerns of potential discrimination, examiners should inform their supervisor so the FCU is considered for a fair lending examination.

Federally Insured State Credit Union Examinations

NCUA has express enforcement authorities over some consumer compliance regulations at FISCUs, and dual authority with the FTC for some others. NCUA’s primary role during a joint FISCU exam is to focus on concerns related to safety and soundness.

Examiners should review the most recent version of the NCUA Instruction 5000.20, Examination Scope for current guidance on required and baseline review steps during a joint examination or insurance review at a FISCU. If an examiner discovers a consumer financial protection violation during an examination of a FISCU, the examiner should work with his or her supervisor and the SSA to appropriately address the violation in the examination report.

Last updated on June 05, 2023