I
105TH CONGRESS
1ST SESSION
H. R. 2552
To amend the requirements in the Federal Credit Union Act relating to
audit requirements and supervisory committee oversight of insured credit
unions, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 25, 1997
Mr. MCCOLLUM (for himself and Mr. BACHUS) introduced the following bill;
which was referred to the Committee on Banking and Financial Services
A BILL
To amend the requirements in the Federal Credit Union
Act relating to audit requirements and supervisory com-
mittee oversight of insured credit unions, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Credit Union Audit
Improvement Act of 1997’’.
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SEC. 2. FINANCIAL STATEMENT AND AUDIT REQUIRE-
MENTS.
Paragraph (6) of section 202(a) of the Federal Credit
Union Act (12 U.S.C. 1782(a)(6)) is amended to read as
follows:
‘‘(6) FINANCIAL STATEMENT AND AUDIT RE-
QUIREMENTS.—
‘‘(A) FINANCIAL STATEMENT.—
‘‘(i) 
IN
GENERAL.—Each 
insured
credit union shall prepare annual financial
statements in conformity with generally
accepted accounting principles.
‘‘(ii) AUDIT REQUIREMENT.—The su-
pervisory committee of each insured credit
union shall have an annual independent
audit of the financial statement of the
credit union performed in accordance with
generally accepted auditing standards by
an independent certified public accountant
or public accountant licensed by the appro-
priate State or jurisdiction to perform such
services.
‘‘(B) EFFECTIVENESS OF INTERNAL CON-
TROLS.—
‘‘(i) 
IN
GENERAL.—Each 
insured
credit union shall prepare a written asser-
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tion annually about the effectiveness of the
internal controls over financial reporting.
‘‘(ii) EXAMINATION OF WRITTEN AS-
SERTION.—The supervisory committee of
each insured credit union shall obtain an-
nually an attestation report on an exam-
ination of management’s written assertion
under clause (i) which shall be prepared in
accordance with generally accepted stand-
ards for attestation engagements by an
independent certified public accountant or
public accountant licensed by the appro-
priate State or jurisdiction to perform such
services.
‘‘(C) COMPLIANCE WITH LAWS AND REGU-
LATIONS.—Each insured credit union shall pre-
pare a written report annually on the extent to
which the credit union is in compliance with
laws and regulations relating to safety and
soundness which have been designated by the
Board.
‘‘(D) 
DE
MINIMUS
EXCEPTION.—This
paragraph shall not apply with respect to any
fiscal year of any insured credit union the total
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assets of which, as of the beginning of such fis-
cal year, are less than $10,000,000.’’.
SEC. 3. REQUIREMENTS FOR SUPERVISORY COMMITTEES.
(a) FEDERAL CREDIT UNIONS.—Section 115 of
the Federal Credit Union Act (12 U.S.C. 1761d) is
amended—
(1) by striking ‘‘The supervisory committee
shall make or cause to be made’’ and all that follows
through ‘‘submit reports of the supplementary au-
dits to the board of directors; may by a unanimous
vote’’ and inserting ‘‘(a) IN GENERAL.—The super-
visory committee may, by a unanimous vote,’’; and
(2) by adding at the end the following new sub-
section:
‘‘(b) MANAGEMENT OVERSIGHT.—
‘‘(1) RISK AREAS.—The supervisory committee
shall—
‘‘(A) identify annually risk areas of the
activities of the credit union; and
‘‘(B) assess the extent to which internal
and external audit coverage is necessary for
those activities of the credit union which the
committee determines have a high risk.
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‘‘(2) INTERNAL AUDITS.—The supervisory com-
mittee shall perform or supervise any internal audits
of the credit union.
‘‘(3) OUTSIDE AUDITORS.—In the case of any
outside audit of the credit union, the supervisory
committee shall engage only an independent certified
public accountant or public accountant licensed by
the appropriate State or jurisdiction to perform such
services.
‘‘(4) AUDIT REPORTS TO BOARD OF DIRECTORS
AND MEMBERS.—The supervisory committee shall—
‘‘(A) promptly submit the audit report of
any internal or outside audit to the board of di-
rectors and the Administration; and
‘‘(B) submit the audit report of any out-
side audit and submit a summary of the audit
report of any internal audit to the members at
the annual meeting following the completion of
any such report.’’.
(b) INSURED
STATE
CREDIT
UNIONS.—Section
201(b) of the Federal Credit Union Act (12 U.S.C.
1781(b)) is amended—
(1) by redesignating paragraphs (8) and (9) as
paragraphs (9) and (10), respectively; and
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(2) by inserting after paragraph (7) the follow-
ing new paragraph:
‘‘(8) to maintain a supervisory committee which
complies with the requirements applicable under sec-
tion 115(b) to a supervisory committee of a Federal
credit union;’’.
SEC. 4. EFFECTIVE DATE.
The amendments made by this Act shall apply with
respect to fiscal years (of insured credit unions) ending
on or after December 15, 1997.
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