Credit Union Examination Reform Act of 2016

To amend the Federal Credit Union Act to extend the examination cycle of the National Credit Union Administration to 18 months for certain credit unions, and for other purposes. 1. Short title This Act may be cited as the Credit Union Examination Reform Act of 2016 2. Extension of examination cycle of the National Credit Union Administration to 18 months (a) Federal credit union examinations Section 106 of the Federal Credit Union Act ( 12 U.S.C. 1756 (1) by striking Federal credit unions (a) In general Federal credit unions ; and (2) by adding at the end the following: (b) 18-Month examination cycle for certain credit unions (1) In general An examination of a Federal credit union described under subsection (a) may only be carried out once during each 18-month period with respect to a Federal credit union that— (A) has total assets of less than $1,000,000,000; (B) is well capitalized, as such term is defined under section 216(c)(1); (C) was found in its most recent examination to be well managed, and its composite rating (under the Uniform Financial Institutions Rating System or an equivalent rating under a comparable rating system)— (i) was a 1, in the case of a Federal credit union that has total assets of more than $200,000,000; or (ii) was a 1 or a 2, in the case of a Federal credit union that has total assets of not more than $200,000,000; and (D) is not currently subject to a formal enforcement proceeding or order by the Administration. (2) Safety and soundness exception Paragraph (1) shall not apply to a Federal credit union if the Administration determines— (A) that such credit union should be examined more often than every 18 months because of safety and soundness concerns; or (B) that such credit union has violated the law. . (b) Insured credit union examinations Section 204 of the Federal Credit Union Act ( 12 U.S.C. 1784 (h) 18-Month examination cycle for certain credit unions (1) In general An examination of an insured credit union described under subsection (a) may only be carried out once during each 18-month period with respect to an insured credit union that— (A) has total assets of less than $1,000,000,000; (B) is well capitalized or adequately capitalized, as such terms are defined, respectively, under section 216(c)(1); (C) was found in its most recent examination to be well managed, and its composite rating (under the Uniform Financial Institutions Rating System or an equivalent rating under a comparable rating system)— (i) was a 1, in the case of an insured credit union that has total assets of more than $200,000,000; or (ii) was a 1 or a 2, in the case of an insured credit union that has total assets of not more than $200,000,000; and (D) is not currently subject to a formal enforcement proceeding or order by the Administration. (2) Safety and soundness exception Paragraph (1) shall not apply to an insured credit union if the Administration determines— (A) that such credit union should be examined more often than every 18 months because of safety and soundness concerns; or (B) that such credit union has violated the law. . (c) Budget savings report Not later than the end of the 180-day period beginning on the date of the enactment of this Act, the National Credit Union Administration shall issue a report to the Congress analyzing how the amendments made by this section affect the budget of the Administration. (d) Rulemaking Not later than the end of the 100-day period beginning on the date of the enactment of this Act, the National Credit Union Administration shall issue regulations to carry out the amendments made by this Act.

Summary: Credit Union Examination Reform Act of 2016 This bill amends the Federal Credit Union Act to permit an examination to be carried out only once every 18 months of a federal credit union or an insured credit union that: has total assets of less than $1 billion; is well capitalized (or adequately capitalized, in the case of an insured credit union); was found in its most recent examination to be well managed, with a composite rating (under the Uniform Financial Institutions Rating System) of 1, in the case of a credit union that has total assets of more than $200 million, or 1 or 2, in the case of a credit union that has total assets of $200 million or less; and is not currently subject to a formal enforcement proceeding or order by the National Credit Union Administration (NCUA). Such limitation shall not apply if the NCUA determines that such a credit union: (1) should be examined more often because of safety and soundness concerns, or (2) has violated the law. The NCUA shall issue a report on how this bill affects its budget.