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Industry Questions

Below are the most commonly asked questions and answers within the industry. To view all of the commonly asked questions, visit our common questions page.

What is a foreign credit union?

A Foreign Credit Union is a credit union that has been organized under the laws of another state or territory of the United States that may conduct business as a state-chartered credit union in this State with the approval of the Administrator, provided state-chartered credit unions incorporated under Articles 14A through 14M of this chapter are allowed to do business in the other state under conditions similar to these provisions.  NCGS §54-109.106

When are dividend approvals required?

When a credit union has a year-to-date negative earnings, management must submit a request to pay dividends to the Division by the 20th of the month in which the dividends will be paid.  The request for approval must include the most recent financials, the current delinquency report, and a list of rates being requested for various share and interest-bearing accounts.  NCGS §54-109.54

What is CECL and do we have to comply?

The Current Expected Credit Losses (CECL) methodology was introduced by the Financial Accounting Standards Board (FASB) in its Accounting Standards Update (ASU) 2016-13, Topic 326. It is a change from the current existing incurred loss model that state-chartered credit unions use to support credit losses. Under CECL, the calculation of the expected credit loss will be computed over the life of the loan, which could initially adversely affect capital levels. This change in methodology will require significant planning, data gathering, modeling, governance/oversight, and training. The current effective date for credit unions is January 1, 2023.  Federally insured credit unions with assets under $10 million are allowed to use any reasonable reserve methodology that adequately covers known and probable loan losses instead of implementing CECL.

Must the Credit Union Division approve changes in core processing systems?

Yes. At least 60 days prior to converting records or changes to Electronic Data Processing (EDP) services/core processing systems, a copy of the proposed contract shall be submitted to the Credit Union Division for approval.  Please see NCAC 06C .0301(c) for more information.

Is there an appeal process for examination findings?

Yes.  Credit union management may appeal examination requirements and findings.  We encourage you to provide continuous and ongoing feedback during the examination and to work with Examiners to resolve disagreements prior to the delivery of the final report.  If differences cannot be resolved with the Examiner, we ask that you contact our Examination Manager for additional discussion and consideration.  If you wish to formally appeal your report, you may do so by writing to the Administrator of the Credit Union Division within 30 days of receiving your final examination report.  If you remain dissatisfied, you may appeal to the Chairman of the Credit Union commission within 30 days of the Administrator's decision..

How many examiners are scheduled for each examination and how long will the examination last?

Scheduling is dependent upon several factors including the overall financial condition of the credit union, the complexity of the credit union, the size of the credit union, historical information, as well as any other factors noted in the pre-scoping process.

How long after the exam is completed should I expect my examination report to be returned to the state-chartered credit union?

Examinations are performed based on the amount of risk identified in each institution; therefore, no two examinations are going to be completed based on the exact same criteria and risk characteristics. After the examination is completed, a formal report is generally written and submitted to the Board and management within 30 days of the exit meeting with management. Some examination reports may be submitted in a much shorter time frame, while more complex and larger examinations take a longer period of time to complete. Regardless of the institution, the Division always strives to communicate the status of all reports during this process.

What are the steps to begin a merger?

When you are considering a merger, please review NCGS §54-109.94 and 04 NCAC 06C .0206.  Prior to moving forward with a merger, please contact the NC Credit Union Division at 984-275-6730 or email us at support@nccud.nc.gov for more information.

How does my credit union become a community charter?

Credit unions seeking a community charter must submit a request letter and detailed information including the area of expansion, rationale, and the fiscal impact as well as a business plan.  Supporting letters from the community in which the expansion will occur will also be needed.  Credit unions considering a community charter should call the Division for an initial discussion.  NCGS §§ 54-109.3 & 54-109.26 and 04 NCAC 06C .0203

If a state-chartered credit union wants to appeal a requirement or an order, to whom does it appeal?

Any state-chartered credit union may appeal to the Commission any finding, ruling, order, decision or the final action of the Administrator by any credit union which feels aggrieved thereby. Notice of such appeal shall be filed with the Chairman of the Commission within 30 days after such finding, ruling, order, decision or other action, and a copy served upon the Administrator. Such notice shall contain a brief statement of the pertinent facts upon which such appeal is grounded. The Commission shall fix a date, time, and place for hearing said appeal, and shall notify the credit union or its attorney at least 30 days prior to the date of said hearing.

How do I relocate an existing state-chartered credit union branch?

If you relocate an existing office in the same county, you must notify the Administrator of the Credit Union Division. If the office is relocated in the same state, but moved out of the county, you must record this with the Register of Deeds of both counties.

Please contact Administrator Kristina Ray at 984-275-6743 or email at kristina.ray@nccud.nc.gov.

How are supervisory fees determined?

Semi-annual supervisory fees are calculated using the total assets of state-chartered credit unions as of the December 31 and June 30 Call Reports. Supervisory Fee Schedules are emailed to credit union managers in January and July. The total fees are based on the projected budgetary needs of the Credit Union Division. The Administrator discounts the fees whenever possible.

How do I open a state-chartered credit union branch?

Please submit a Branch application that is inclusive of a business plan with a three-year proforma as well as a marketing plan. Please contact the Credit Union Division for more information at 984-275-6730 or email support@nccud.nc.govNCGS § 54-109.6

What is a Registered Agent?

A registered agent is a designated representative of a credit union who serves as an agent for the service of process in NC.

Are state-chartered credit unions charged fees for follow-up examinations?

The Division does not charge examination fees for the initial follow-up contact after an examination. For any subsequent contacts after the initial follow-up, the Division assesess a fee at the same hourly rate as the examination rate.

What actions are approved by the Credit Union Division?

How long are we required to retain state-chartered credit union records?

Records are classified as either permanent or non-permanent and should be maintained in accordance with 04 NCAC 06C .1001 and .1002 Retention of Records. Refer to the Administrative Code for detailed information.