Training Newbie Examiners:

Small  State CU CEO (Reported 1/30/2026):  I'm currently going through a State exam and it's been almost 2 months. My examiner in charge was a loan officer at another small CU and I feel like I have to "train" him how to read my financials and I just have no time for that and zero respect for our State examiners. I'm considering a Fed charter because this is just too much. My last Examiner in charge came from the insurance sector and again we had to train her also. It's ridiculous. If you don't know financial then how are you the one to judge me!  - CEO "C"

Small FCU West Cost (Doug Wadsworth, 2025): We had a young new NCUA examiner last year, he was polite, thoughtful and thorough, and we liked him. However, because he had relative inexperience at little CUs, he didn't have a concept of how to flexibly "right-size" the regulations because of our small size.  He was rigidly stuck on how big CUs in a perfect world would comply, and tried to hold us to the same standard.  We need examiners with experience, who know how and when to be flexible with tiny shops that just don't have the employees or resources to comply the same way a big CU does, they need to allow our in-house DIY compliance, at long as it satisfies the most minimum interpretation of the regulation, without impacting our safety and soundness.  When regulators use our small CUs as the "training ground" for new examiners, it disproportionally ends up hurting the small institutions who can least afford it. 

Unrealistic Supervisory Volunteer Expectations:

Small FCU West Coast (Reported 2025)

Usually my NCUA examiners are fine, they are nice and they try hard to be fair.  However, a few years ago, we had an examiner who had a particularly challenging personality, and in the private interview with my Supervisory Chair, she literally and explicitly challenged her qualifications for the "job," so my volunteer had to list all her experience in bookkeeping and running small business. She came out so shaken up and upset, and explained how she felt like she had been in the hotseat getting criticized for an hour. She almost quit that night, but I convinced her to stay (and had to complain to the NCUA examiner's supervisor). Again, during my exam just a few weeks ago, although my current examiners are kind and do their beset, it was still was a stressful "hot seat" for my volunteer, because she didn't recognize the terms they were using to distinguish between different types of audits she had been performing. If I was able to sit in with her during the interview, I could have cleared up so much mis-communication and relieved the stress from my volunteer. In addition, the examiners pushed her to "over-comply" in a few areas, which was not necessary, but now puts me in an awkward situation, after the fact. The past couple years when I explain to my examiners the difficulty of replacing volunteers, they are under the impression that it should be easy because people would "want it on their resume." Perhaps credit unions with hundreds of thousands of members can find someone, but I only have 5,000, and this is always a significant challenge. We don't want to lose our existing ones!

CEO K: They [NCUA] have been especially critical of all my volunteers; I lost one board member and almost another SC because the expectations are high, and these volunteers feel in-over-their-head, so to speak. 

CEO D2: [Due to NCUA pressure,] …we have outsourced [our supervisory committee audit] functions to our external auditors and they do a quarterly audit to cover everything except the cash audits since the auditors are remote… It can be a tough balance especially for smaller credit unions where finding volunteers can be difficult and the volunteers can become overwhelmed and it might drive them away. I hope there will be more of an understanding about this and they will consider more about the complexity of the credit union and the mitigating controls the credit union has in place.

CEO D3: I had an examiner write a DOR and told me I was basically not allowed to use my account as a member because on my app I would transfer money $30 at a time for some other employees to watch my dog when I'd go out of town! They literally told me I should pull cash and pay people in cash (which I think is more sketchy if I'm always pulling cash and I can note that it is for Doggo on the memo from my app). I was very unhappy! I should be allowed to be a member of my own credit union, because my supervisory committee is VERY active and looks at my account at least quarterly. Then I got a DOR and the way it was written is that EACH and EVERY employee account should be monitored every month by the Supervisory Committee. Although my examiners acknowledged the regulation didn’t actually require this, they wanted to see it more often... though they already do it every quarter! Things like this to me are very unreasonable and unfair and not what they would EVER give a DOR to anyone else for or even request or think it is a good idea. It is very much an overreach.[pushed on supervisory committee by the NCUA in a private meeting]. [Note from Doug: Clear over-compliance pressure from examiners.]

CEO D4: I’m just thankful to have 3 volunteers to fill the positions to meet compliance. I have a spreadsheet of items for them to review each month, and they do come in and complete those….again, just to meet compliance. They are not highly trained to really know the regulations and what they need to look for or recommend any changes. Most times, I’m answering their questions and they sign o􀆯. [The] Quarterly Supervisory Committee meetings [they are being pushed by the examiner to hold] are a joke. They go thru the motions and I type up some minutes and call it good. Again, just meeting compliance [busy work of over-compliance, but no value.]

I do believe their [NCUA] expectations are unrealistic. My Examiner does the same thing as yours…..pulls my Supervisory chair into the o􀆯ice and grills him. Usually, I try to brief him ahead of time and explain, “less is more. Don’t o􀆯er any information that you’re not asked and keep your answers short.” I feel like they [NCUA Examiners] try to “trick” them into finding something, that they can write us up for. My Internal Auditor completes many of these tasks annually. For surprise cash counts, my committee will do 1, once a month, but we also perform surprise cash counts on EVERY teller, every month. (Me, my Asst Mgr and my bookkeeper take turns and rotate which employee drawer we count. We document this for the committee). [Note from Doug: The frequency here is clear over-compliance]

Over-Compliance Pressure:

Anonymous CEO Feedback (T of NI): Non-material “misstated regulatory requirement” example (phone-based loan applications): In a recent examination at XXXX FCU, the examiner asserted that the credit union was “violating regulation” by taking loan applications over the phone, stating that member signatures and formal written authorization were required before accepting an application, pulling credit, or proceeding with underwriting. Management requested that the examiner cite the specific regulatory provision supporting this requirement. Rather than identifying a clear rule, the discussion became a back-and-forth disagreement, with the examiner continuing to present the expectation as a regulatory mandate. This appeared to reflect a misunderstanding or misapplication of supervisory guidance rather than a material compliance deficiency, yet it created unnecessary friction and examiner-driven “requirements” not clearly grounded in regulation.  [Note from ESCUD: This examiner is ridiculously incorrect, the majority of CUs allow this, and it has been a standard practice for at least 25 years. Observe the time wasted at the small CU as they had to argue this inance point.] 

CEO Feedback (Doug Wadsworth, 2025)

The Bi-Annual Account Verification Regulation: According to the written NCUA regulation, we have to notify all members, every other year, that: “if there are problems with their statements or account, to respond to the Supervisory Committee,” and we provide the address for them.. Well, like 15 years ago I found the cheapest and easiest way, was to just put that text on our statement , as the “statement message”, one time, every other year. Have been doing it that way since.

Well, the NCUA regulators just got done meeting with my Supervisory chair today, and are trying to push HER, to push ME, to instead hire our 3rd party CPA to do that…  I am a small CU with a very tight budget, why would I pay thousands of dollars to hire some 3rd party to do what we can do ourselves, for free, and we can meet the regulation that way, anyway?  Related, even worse, a few years before, a previous examiner (despite being a nice person), pressured me to change the “return address” on that specific statement run for the account verification audit, to "ensure any answers were sent to my supervisory committee." However, they would then go to a PO box, which the Supervsiory Committee only checks every month or two... The examiner assured me this was prudent best practices.  Holy cow, what a nightmare that turned into!  A bunch of my members started sending loan payments to that Supervisory PO Box (because they saw the return address), and then we had loan payments being delayed sitting in a PO box, cascading into late payments and credit score damage. What a horrible suggestion, and "over-compliance" to boot.

In my nearly 25 years I have received a response to this account verification audit *ONCE,* and to change a huge thing (like the return address on our statement) and for that to then cause so many problems, is just not acceptable, and it wasn't even a regulation that I do it that way, just the examiners "idea" - I should have checked the regulation. In current times when nobody even uses physical mail anymore (they report problems directly, with email, with text, to consumer protection bureaus, etc.), the entire Account Verification audit itself is outdated and redundant to begin with.  

Anonymous CEO Feedback (2025) (summary of verbal discussion): This CEO of a $26M credit union (just this year) was written a DOR because her board meeting minutes were too short. IE: They wanted her to write more. She had to fight back hard, as it was going to make her ineligible for a low-income CU grant she had applied for. She eventually got her NCUA District Supervisor to admit (during their joint conference), that she was sufficiently capitalized, with safe and sound past and present business practice, along with a fully engaged and knowledgeable board, so they finally agreed to reduce it to just a "finding." The process wasted many hours of her time, and caused unnecessary friction. [Note from Doug: I looked at these “deficient” board minutes, and they were just as detailed as my own are every month, and my board minutes have never been questioned by any NCUA examiner.]

Anonymous CEO Feedback: We were required to outsource our Asset Liability Management (ALM) and CECL reporting due to perceived lack of sophistication. Yet, the outsourced expert reports—spanning 35–50 pages—were criticized by examiners. These reports have not altered our operational decisions, as their content largely reflects commonsense insights already known to management. Small credit union CEOs are deeply involved in every aspect of operations and may use simpler terminology, but that does not equate to lack of understanding. These reports appear to serve the regulator more than the institution, replacing meaningful engagement with paperwork. The cumulative effect of [practices like this] is a regulatory environment that feels punitive rather than supportive. Small credit unions are not asking for exemption from oversight—we are asking for oversight that is proportionate, consistent, and respectful of our scale and structure. The current approach risks driving small institutions out of existence, not because they are unsafe or unsound, but because they are overburdened by one-size-fits-all regulation.

Anonymous CEO (2026): Since taking over in 2021, we've had net worth hovering around the 7% threshold. We have remained well-capitalized in every quarter, and as of September 30 (our most recent regulatory exam), we were at 7.41%. Not where we want it, but still well-capitalized.  Unfortunately, our "low" net worth is being compared to peer when we speak with examiners, so we're punished for our net worth ratio. We're under $500MM, so the risk-based net worth calculations aren't applicable. However, when being well-capitalized isn't sufficient, the bar is enforced at a higher level than what regulation requires.  I understand their concerns, and trust me, they linger in my mind as every day passes. However, to be punished for it is far fetching, in my mind. If they want a 8% or 9% net worth before they're comfortable, then I need to see in regulation where 8% or 9% is the new threshold for well-capitalized. 

Small FCU from East Cost (Reported 2025)

I have had many Examiners through the years who I loved and learned quite a bit from, though most are retired.  They included Nancy Zebniak, Charlie Conant, Michelle Maynard). Starting in 2014 or so, we noticed that the Examiners we were assigned usually stated that we were the 1st or 2nd exam that they were doing solo.  This meant, generally, that we were actually showing them various accounting or other items that they were unfamiliar with.  No problem there. But by the time we receive the draft or report, at least a month later, there were items never even discussed that were ‘suggested’ by their Supervisor.  I would push back, I would be told by the supervisor that they would take a look at my response, then I would never hear from her again and it would be in our report.

 One classic item of contention involved Disaster Recovery Site: We are located just north of XXXXX.  My DR site was listed for [XXXX another CU] a couple miles further north that was on the same core at the time: 

Disaster Recovery Location: “….. This location is less than two miles from [other CU]. If a natural catastrophe were to occur in [your city or nearby cities] it is likely that this alternate location will suffer the same.”

I noted during our exit interview that [other CU] listed both their HS branch (0.2 miles away from their office) and [other CU].  The same Examiner and same Supervisor for both CU’s with exams only months apart.  [My CU] written up while the other was not.  When I asked why the discrepancy, I was told “we don’t discuss other CU Exam Findings.”  The Examiner is no longer with NCUA and I understand the Supervisor has since retired.

Also, there has been significant inconsistencies, such as:

TRANSACTION RISK:  2014 “Internal Controls are better than peer” and we receive a ‘moderate risk’ designation.  Next exam in 2016, after we had developed cash limits for vault & tellers, improved OFAC checks on loans and member transactions, conducted BSA training for Board & Supervisory, improved password procedures, limited check signing authority, more frequent cash counts and improved the reports which are reviewed, were got a High Risk designation with “your internal controls are weak”.

ALL (the old days):  The calculations on the report were incorrect and they thought our reserves were insufficient.  In actuality, we were 65% over funded based on proper calculations, which our BOD had approved the overfunding.  The Examiner that for that 2016 Exam is no longer with NCUA I’m told.

Our Supervisory Auditor works for several small CU’s, in [our state].  She jokingly asked me multiple times what I had ever done to that now-retired Supervisor, since of all the CU’s that she does audits for [our CU] is the always one of the easiest for her.  In fact, she had recommended [our CU] to help other CU’s with specific items, including Call Reports and Corporate Acct reconciliations when they hire new Managers/CEO’s who were unfamiliar with the CUSA system, since I had been on it for over 30 years. 

I will say that our last 2 exams ( effective 9/2023 and 9/2024) have been much better, as those folks had experience and an understanding of small CUs. [Doug: Hooray, thank you NCUA!]

-Small CU CEO "B"

Anonymous CU CEO: NCUA Board guidance has indicated that credit unions with a CAMEL rating of 2 or better should be examined every 18–24 months. Yet [my small CU] continued to receive annual exams until very recently. When questioned, we were told this was due to our “complexity”—a vague rationale that contradicts both our asset size and operational simplicity. Moreover, examiners admitted they suspected issues but could not identify any. This approach fosters distrust and creates undue stress for small credit union teams. The cumulative effect of [this practice] is a regulatory environment that feels punitive rather than supportive. Small credit unions are not asking for exemption from oversight—we are asking for oversight that is proportionate, consistent, and respectful of our scale and structure. The current approach risks driving small institutions out of existence, not because they are unsafe or unsound, but because they are overburdened by one-size-fits-all regulation.

BSA Examination Pressure

Anonymous CEO Feedback (S of UT) Non-material “expectation creep” example (SAR filing volume): In our most recent examination, the examiner noted that [our] FCU files Suspicious Activity Reports (SARs) infrequently and stated this was “not typical.” We explained that as a small, SEG-based credit union with a close, longstanding member relationship, we rarely encounter truly suspicious activity among our membership. Our independent audit has also confirmed that we follow BSA/AML procedures thoroughly and consistently. Because we know our members well, we are often able to resolve concerns through direct, appropriate questioning and documentation. The examiner indicated she understood this context, but still expressed an expectation that SARs should be filed “every time a member is scammed,” despite our understanding that SAR requirements are risk- and fact-specific rather than automatic in all victim scenarios. Given that the overall examination was strong, this appeared to function more as an informal, unwritten expectation rather than a material deficiency or clear regulatory requirement, yet it was nonetheless documented as an area of concern. 

CEO Feedback from Doug Wadsworth (myself): Anytime there is ANY missing tiny problem or clerical error related to the BSA, examiners turn it into a DOR, even when it’s clearly not a systemic issue. For example, my last NCUA exam was only a few weeks after my CPA AUP audit and we had only filed a single SAR during the past year. Well, apparently after giving it to our CPA Auditor for his audit (he reviewed and acknowledged we had done it in his audit records and report), we then misfiled the original copy when putting away his audit papers. Our NCUA examiner demanded we produce it, and wouldn’t accept that it was lost. He essentially threatened a DOR if we couldn’t produce the original full copy (even though he could see that CPA had just verified we had done it correctly, and he verified we had submitted it by looking at the BSA online database). Multiple employees (we only have about a dozen) wasted hours searching through hundreds of electronic and paper documents and files… but we finally found it (among the other CTRs we had put away after the CPA audit). What a waste of valuable time, trying to avoid the threat of his pointless DOR. Next time I am tempted to just say: “Fine, issue your DOR, because it isn’t worth my wasting hours of my employees time so you can check the box on something that is totally unrelated to our safety or soundness, anyway.” The problem is… that DORs go to the board of directors (CEO boss), and makes us look bad, and since the board decides our wages, the examiner really has leverage with DOR threats, like a gun to our head.

CEO D Feedback:  That CTR limit should be raised. I only have 1 back-office employee and she spends a lot of time on these. She’s got a million other duties, so raising the limit would help lessen the burden of so many CTR’s to file. BSA training for the Board and Supervisory Committee is a waste of time. They do not retain it, nor do they ever use it, since they are not working in the CU on a daily basis.  We have to hire a CPA to do the BSA audit annually, because the Supervisory Comm doesn’t really know what to look for anyway.

CEO Feedback (Doug Wadsworth):  As a small CEO we know many of our members, and are quite aware of suspicious activity - and usually nip "sketchy" people or activity early on (in the bud). Well, we just don't need to file many SARs, ever.  Many years ago we got pressured to file *more* SARs, so we finally picked something that seemed suspicious, then got "written up" because it really wasn't suspicious enough and didn't need a SAR, LOL. We still only have about 1 instance per year when a SAR is justified.  Well, for some reasons my examiners want us to file *more* SARs, even though we just don't have much suspicious activity. What are we supposed to do, make them up to satisfy examiners? So, for two exams in a row now (just last year), the NCUA has tried to pressure me to document any time we do *NOT* need to file a  SAR. Yes, you read that right, they want to me to document every time I don't have to comply with a regulation?!  This is insanity, I have had to push back *really* hard twice now, to not have to have some complicated log of every time I don't have to comply with something?  If I don't' push back on this type of excessive/labor intensive "advice" eventually we would be swamped with busy work that isn't even required. I know, examiners are just trying to do their jobs, but - lets stick to regulations, and not pressure a small CUs to over-comply, things like that add up and eventually put is out of business by draining our money and resources.

DOR Threats (not urgent or important)

Anonymous CEO Feedback: Historically, NCUA examiners provided examples or resources to help credit unions address findings or Documents of Resolution (DORs). That practice ceased in the early 2000s. Today, credit unions are expected to interpret vague directives without guidance, consuming valuable time and resources. If NCUA has a specific expectation, it should be clearly communicated with examples—especially for institutions with limited staffing. The cumulative effect of [practices like this] is a regulatory environment that feels punitive rather than supportive. Small credit unions are not asking for exemption from oversight—we are asking for oversight that is proportionate, consistent, and respectful of our scale and structure. The current approach risks driving small institutions out of existence, not because they are unsafe or unsound, but because they are overburdened by one-size-fits-all regulation. [The NCUA is making great progress on this already in 2026, thank you!]

Anonymous CEO Feedback (2025) (summary of verbal discussion): This CEO of a $26M credit union (just this year) was written a DOR because her board meeting minutes were too short. IE: They wanted her to write more. She had to fight back hard, as it was going to make her ineligible for a low-income CU grant she had applied for. She eventually got her NCUA District Supervisor to admit (during their joint conference), that she was sufficiently capitalized, with safe and sound past and present business practice, along with a fully engaged and knowledgeable board, so they finally agreed to reduce it to just a "finding." The process wasted many hours of her time, and caused unnecessary friction. [Note from Doug: I looked at these “deficient” board minutes, and they were just as detailed as my own are every month, and my board minutes have never been questioned by any NCUA examiner.]

Random Regulation Horror

CECL: 

CEO A Feedback: I am using the newly offered NCUA CECL calculation tool, but it is cumbersome and the last Examiner told me I wasn’t doing it correctly, even though I followed the directions and he couldn’t explain what I needed to do differently.  He also told me I needed to use the Peer Averages and I said, NO, those don’t fit our credit union.

CEO B Feedback: My grouping is up to $50M in assets. Even at that, we’re not comparing apples to apples and my CU membership/environment is different than that of others. Please don’t tell me my delinquencies are too high, my expenses are too high, etc. and then you write me up for that and bring down my Management CAMEL score. Each CU has a different membership and we cater to those needs, which are probably different everywhere. We are a very healthy CU with 19% Capital, so back off!

HMDA: 

CEO Doug Wadsworth: Despite my very small size, I am now required to do perform HMDA tracking and reporting every year, this is an enormous, complicated and expensive time-waster.  The minimum required number of mortgages or home equity loans per year used to be 500, then it dropped to 100, then just last year, to 25.  We are tiny, we book all our mortgage or home equity loans in-house (we don’t do anything with the secondary market), yet, we have a HMDA reporting burden… and most of it requires manual entry (as we can’t afford the fancy automated software tracking tools).  Why did the number of mortgages  necessitating reporting drop from 500, down to 25 in the past few years? Are they *trying* to put tiny credit unions out of business? 

NMLS: 

CEO Doug Wadsworth: The National Mortgage Registry… Possibly the most complicated, non-intuitive, labor-intensive, time-wasting website ever created in bureaucrat history.  It requires any small CU employee who even *talks* about a home equity loan, to go through this highly complex registration process with this national system, pay a fee to enroll, fingerprints, and then annual renewal, plus annual renewal expense of institution.  Their website is impossible to navigate, so every website every visit requires a call for technical support, (they keep publishing instruction BOOKS because of the bad reviews, that don’t help and make it take even longer... an instruction book to renew something?).  In addition, regulations require every single document, through every stage of the mortgage lending process, to have the unique NMLS number of each different employee and the institution, and it is particularly challenging (at a small CU) to configure different loan systems and documents types to pull this information in, and of course it is something that the NCUA examiners militantly examine, and threaten DORs on in case there is one in twenty documents that somehow there was a computer bug with… And honestly, has any person in history ever received any value from this? Do any of our members even know what it is or notice it?  How many mortgage applicants “look up” that NMLS number after they come apply at a small Credit Union?  I would wager less than 3 times, in 10 years and millions of loans. This regulation originated with some CYA politician who wanted their name on a piece of legislation, so they would look good to their voters after the 2008 housing crash.  IE: A solution, without a problem. 

CEO A Feedback: This one is extremely frustrating! We don’t even offer mortgages in-house, but have to have this NMLS # to even talk to Members about how our mortgage process with our 3rd party works. Currently I’m the only one with a NMLS # and have been trying for the past YEAR to get 2 of my staff registered! They’ve [NMLS] lost the applications one time, lost fingerprints another time, and we’ve gone through the entire process, 3 times so far. It takes time (my staff have to be given time off to go get their fingerprints, which is not local) and we’ve paid the application fee 3 times now too! And they still don’t have their NMLS #’s!!

ALM/NEV: 

CEO Doug Wadsworth: We are all expected to conduct “rate shock analysis” on our loan portfolios and income statement. The examiner expectations for small credit unions are so high, we can no longer use the simple in-house GAP method, but have to hire a 3rd party to preform it.  This adds significant time or expense to small CUs. How much value is there for a small CU? None, it doesn't not provide any positive impact to our safety or soundness (just a cost and time drain).

CEO C Feedback:  I also have to pay a 3rd party to do all the ALM calculations to stay in compliance.  Most times I quickly peruse the lengthy report and then put it away for the Examiner, just to meet their requirement. I don’t think they even know how to read the report.

Bond Renewal:  

CEO Doug Wadsworth: Many years ago, apparently one credit union somewhere, doctored their bond insurance renewal documents, so their credit union wasn’t adequately insured, and there was a loss, I guess?  For all these past years, every year the NCUA examiners would review our bond insurance to ensure they meet the regulation, and the board of directors have never really had to be involved.  Until now… a few years ago the NCUA decided to complicate the regulation, and developed a series of new regulatory hoops we have to jump through, and which requires board involvement, appointing a different official signatory each year, obtaining paper/ink signatures on the renewal, documentation in board minutes, etc… or you risk getting “written up” for not doing it exactly right.  However, despite the regulations being 100 times more complicated and burdensome now, it is just as ineffective in reducing the risk of a loss! There is no benefit to anyone, just more work for the CEO, more work for the board, longer examinations and more DOR threats.

CEO E Feedback: I got dinged by an Examiner the first time, then have been following their “rules” for the last couple of years. I also got dinged because even though the Board member signed all the documents and there was a motion in the Board Minutes to approve, the minutes stated that “[The CEO] presented the Bond Renewal for discussion.” Rather than that “Board Member” presenting the renewal. This is ridiculous!!