Credit Union Exam Solutions Presents With Flying Colors

In this episode, Mark Treichel sits down with Steve Farrar and Todd Miller — both former NCUA veterans with over 60 years of combined regulatory experience — to break down exactly what a Code 4 means for your credit union, your board, and your relationships with every lender you work with.Steve spent 15 years as a Problem Case Officer on the West Coast before moving to NCUA's Division of Risk Management in the central office, where he worked on enforcement, corporate resolution, and risk-based capital. Todd spent 34 years with NCUA, including a decade as an examiner and PCO, followed by 11 years as Director of Special Actions in the Western Region.Together, they cover: what NCUA is actually doing when they code you a 4 (hint: building an administrative record), how often you'll see your examiner (more than you think), why the Federal Reserve, FHLB, and Fannie Mae all find out about your status, what Section 701.14 means for management and board changes, why assignment to Special Actions isn't always bad news, and what separates credit unions that recover from those that don't.If you're a Code 4 — or worried you might become one — this episode gives you the insider perspective on what's coming and how to navigate it.

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/In this episode, Mark Treichel responds directly to a podcast released by the American Bankers Association (ABA) titled “Are Credit Union Commercial Loans Risky Business?” — a 12-minute episode that contains significant factual errors, conflates distinct regulatory mechanisms, and presents advocacy as analysis.Mark draws on 33 years at NCUA — including eight years as Executive Director — and nearly six years in consulting to walk through eight specific claims from the ABA podcast, providing historical context, regulatory detail, and current data from NCUA call reports to address each one.Topics CoveredHistorical BackgroundThe ABA’s 35-year campaign against credit union expansion — from the 1990 field-of-membership lawsuit argued for the ABA by then-attorney John Roberts, through the Supreme Court victory, through the congressional response with HR 1151, the Credit Union Membership Access Act of 1998, and the origin of the 12.25% MBL cap as a political compromise rather than a safety-and-soundness limit. How that cap ended up jumpstarting the credit union business lending industry — the law of unintended consequences.Claim 1 — The 2016 Rule Change Was a RelaxationMark untangles two separate errors: the invented waiver mechanism for exceeding the MBL cap (which does not exist — the cap is statutory and cannot be waived by NCUA) and the conflation of the loan-level underwriting waiver process (what actually changed in 2016) with the cap itself. Over 1,000 active waivers were on file before the change; NCUA replaced prescriptive checkboxes with a principles-based framework consistent with OCC and FDIC practice.Claim 2 — The MBL Cap Is NotionalEvery exemption the ABA criticizes — low-income designation, bank acquisitions — was created by Congress, not by credit unions circumventing the system. Using a congressionally authorized exemption is compliance, not circumvention.Claim 3 — The Low-Income Designation ExplosionThe total number of federally insured credit unions fell from 5,048 in 2021 to 4,374 by year-end 2025, a decline of more than 13% in four years. A shrinking denominator drives percentage increases independent of raw count changes. NCUA outreach encouraged eligible institutions to apply for a designation they were already entitled to.Claim 4 — NCUA Lacks Commercial Lending ExpertiseNCUA has had member business lending regulations since the 1980s, updated comprehensively in 2003 and modernized again in 2016. The agency maintains specialized commercial lending examination staff, concentration risk guidance, and net worth standards that apply to commercial lending activity.Claim 5 — Bank Acquisition Commercial Loan ComparisonWhen a credit union acquires a commercial bank, it acquires that bank’s loan portfolio. The finding that post-acquisition credit unions carry more commercial loans is a mathematical inevitability, not evidence of a supervisory problem.Claim 6 — These Loans Haven’t Been Through StressBank commercial real estate delinquencies peaked at 9% in 2009 and 2010 under OCC, FDIC, and Federal Reserve supervision. Current credit union commercial loan delinquency as of year-end 2025 is approximately 1% — or 0.44% using the 60-plus-day definition. Former NCUA Chairman Todd Harper has observed that well-underwritten member business loans have the ability to perform differently across economic cycles than auto or mortgage loans — diversification into business lending, done right, is a protection for the system.Claim 7 — Small Business Satisfaction DataThe Federal Reserve Small Business Credit Survey measures satisfaction among approved applicants at institutions borrowers chose to apply to — a population filtered by membership eligibility requirements. It is not a direct comparison between institution types. Credit unions consistently score among the highest of any financial institution type in the American Customer Satisfaction Index across the full membership.Claim 8 — The Tax Exemption and Level Playing FieldThe credit union tax exemption reflects the cooperative structure: member-owned, with earnings returning to members through lower loan rates, higher deposit returns, and reduced fees. Congress has reviewed this treatment many times and has chosen to maintain it.Takeaways for Credit Union ExecutivesKnow the history and be prepared to counter these arguments with facts. Run a well-managed institution with strong underwriting standards and appropriate capital. Engage proactively with your exam process. Know your data. Be skeptical of statistics presented without context.Resources Referenced•        Credit Union Conversations podcast with Mark Ritter (episode featuring former NCUA Chairman Todd Harper and Mike Radway on HR 1151 history)•        NCUA call report data, year-end 2025•        Federal Register — 2016 NCUA Member Business Lending rule•        America’s Credit Unions Governmental Affairs Conference (GAC)

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/In this episode, Mark Treichel walks through the full-year 2025 CAMEL code data across all four quarters, providing a comprehensive analysis of where the industry stands and what the numbers mean for credit unions at every asset tier.The episode opens with context: in September 2024, then-National Credit Union Administration Chairman Todd Harper sounded a public alarm after the number of complex credit unions — those over $500 million in assets — coded at CAMEL four or five tripled in a single quarter. That alarm set the benchmark for evaluating 2025's results.Mark frames the analysis around three perspectives: the glass half full (optimistic), the glass half empty (skeptical), and the base case (pragmatic). He works through the data at an industry level before breaking it down by asset tier, where a more complicated picture emerges.Key findings include: the overall improvement in code four and five counts; a significant reduction in dollar exposure in troubled institutions; the resolution of Harper's specific alarm as the complex credit union count returned to seven at year-end; and the Q2 2025 anomaly, where the code three count fell but assets in that bucket jumped by $25 billion — illustrating how quickly the composition of a tier can shift even when the headline count moves in the right direction.A critical section covers the mid-size tier — $100 million to $500 million in assets — where 2025 produced almost no improvement. Code fours and fives in that range actually ticked upward. Mark explains the particular pressures mid-size institutions face and why the headline numbers can obscure their reality.The episode also addresses the National Credit Union Administration's staffing situation in depth: a 27% reduction in force, a shift in exam cycle requirements from mandates to goals, and the quiet update to the National Supervision Policy Manual extending exam cycles for larger institutions. Mark raises a pointed question: do the CAMEL code improvements reflect genuine rehabilitation, or do they partly reflect an agency adjusting to resource constraints?The episode closes with practical guidance for what to do based on your CAMEL code, and a look ahead to 2026 — including the hiring freeze, rising delinquency trends, and potential leadership changes at the agency. Topics Covered:•        The Harper Alarm: context from September 2024 and how 2025 resolved it•        Full-year CAMEL code trends across all five quarter-ends•        Asset tier breakdown: $500M+, $100M–$500M, and under $100M•        The Q2 2025 anomaly: count down, dollar exposure up•        National Credit Union Administration staffing: 27% reduction, exam cycle changes, and the truth-in-coding question•        Glass half full: genuine improvements and the resolution of the Harper alarm•        Glass half empty: uneven distribution, merger effects, and delinquency trends•        The base case: what every credit union should do based on its CAMEL code•        What to watch in 2026

www.marktreichel.comhttps://www.linkedin.com/in/mark-treichel/In this solo episode of With Flying Colors, host Mark Treichel presents a comprehensive data analysis of credit union mergers using thirty quarters of NCUA quarterly merger reports, covering activity from the third quarter of 2018 through 2025. The dataset includes 1,901 credit unions involved in merger activity, 1,298 completed mergers, and over $111 billion in merged assets.Mark walks through the consolidation math: credit union mergers typically run between 130 and 180 per year, representing three to four percent of all charters annually. The most notable trend in the data is the dramatic increase in the average size of merging credit unions—from $36 million in average assets in 2018 to $285 million in 2025, roughly an eight-fold increase. Total merged assets in 2025 reached $45 billion, the highest annual figure in the dataset.The episode examines the 80/20 split between voluntary and involuntary mergers, clarifying what the "involuntary" designation actually means in NCUA's reporting—and why it is frequently misunderstood. Mark also profiles the characteristics of serial acquirers, including one credit union that completed 24 mergers in four years, and discusses the different strategic approaches active acquirers take.The pre-merger financial profile section compares median data from merging credit unions against the broader population, with return on assets, membership growth, loan-to-share ratios, net worth, and delinquency all examined. Mark identifies the two metrics he considers most predictive: earnings and membership growth.The episode closes with a look at charter conversion trends—specifically the significant swing back toward federal charters since 2021—and a projection of where the industry is headed over the next 25 years under different consolidation rate scenarios.Topics covered include:•        Annual merger volumes and the peak year of 2019 (254 mergers)•        The dramatic rise in average merger size: $36M (2018) to $285M (2025)•        What "voluntary" and "involuntary" really mean in NCUA merger data•        The 265 involuntary mergers: financial condition, official challenges, management, and sponsor loss•        Serial acquirers and scale players: different strategies, same data source•        Pre-merger profile: median $11M in assets, negative ROA, membership declining at -91bps•        Acquirer profile: median $2.5B in assets, 82bps ROA, 139,000 members•        Charter conversion trends: $41B moved back to the federal charter since 2021•        Industry projections: 1,555 to 2,015 charters by 2050 under current consolidation rates•        Strategic implications: board governance, membership growth, earnings discipline 

Two documents shape how NCUA conducts credit union examinations: the Examiner's Guide and the National Supervision Policy Manual (NSPM). In this episode, Mark Treichel sits down with former NCUA veterans Todd Miller and Steve Farrar to break down what credit unions need to know about both.  The discussion covers the history behind these documents—including why NCUA's six regions once operated so differently that the Board mandated standardization—and provides practical guidance on which sections credit unions should prioritize.  Topics discussed in this episode:  • Why the NSPM was created and how it standardized examination procedures across NCUA's regions  • What happened to the Examiner's Guide and why it's been de-emphasized  • The reference sections in the Examiner's Guide that remain valuable for credit unions  • Key NSPM chapters every credit union should review: District Management, Federal/FSCU Programs, and Regulatory Waivers  • Response timeframes for administrative actions and appeals  • Transparency gaps: missing chapters, dead links, and redacted sections  • How to use both documents strategically when preparing for examinations  Whether you're preparing for an upcoming exam, navigating an enforcement action, or simply want to understand how your regulator operates, this episode provides the insider perspective.  Resources mentioned:  • NCUA's publicly available redacted NSPM  • NCUA Examiner's Guide (web-based version)  • Related episodes on CAMEL Code 3 and 4 ratings, appeals process, and Documents of Resolution 

Steve Farrar, former NCUA examiner and turnaround specialist; Todd Miller, ex-NCUA director and ALM/risk adviser; Dennis Bauer, former CFO and call-report consultant. They unpack Q4 2025 data. They talk capital and GAAP net worth trends. They discuss stretched investment maturities and rising loan durations. They highlight growing delinquencies, regional stress, and pressure on allowances.

In this episode of With Flying Colors, Mark Treichel sits down with Todd Miller to explore what makes credit union policies effective — and what separates the policy frameworks at high-performing credit unions from those that consistently generate examination findings. Todd, who spent over 33 years at NCUA including a decade as Director of Special Actions, draws on his experience examining credit unions across the full performance spectrum. He shares what he consistently saw in top-performing organizations: strong written policies that created transparency at every level, from the boardroom to the branch. The conversation covers why policies matter beyond regulatory compliance, including their role as training tools, culture builders, and accountability mechanisms. Todd outlines the general principles that underpin effective policy management — from top-down implementation and accessibility to the importance of consequences for non-compliance and the disciplined handling of policy exceptions. The heart of the episode is Todd's breakdown of common elements that should appear in every credit union policy, regardless of subject matter: purpose and objectives, accountability structures, risk appetite statements with real limits, systems of trend-based reporting, and scheduled review processes. He explains why policy limits should be unique to each credit union, why guidelines are no substitute for hard limits, and why trend reporting matters more to board members than point-in-time snapshots. Mark and Todd also discuss the connection between policy compliance and organizational culture, including how violations of individual authority limits can erode morale, create bond claim exposure, and — in the most serious cases — lead to insurance fund losses.

Jason Stverak, Chief Advocacy Officer at DCUC, fights policy battles for defense and community credit unions. He discusses the shutdown’s effect on Coast Guard pay, interchange rules and the spread of state regulation, the proposed 10% interest cap, and opposition from the banking lobby to credit union bank purchases. Short, urgent conversation about threats and practical responses.

When a crisis hits your credit union—whether it’s a cyber breach, ransomware attack, or liquidity event—how you communicate in those first hours and days can define the outcome. In this episode, Mark Treichel sits down with John McKechnie to discuss crisis communication lessons learned from decades in the credit union industry.  John served at CUNA for over 18 years before joining NCUA, where he led the Office of Public and Congressional Affairs under three chairmen during some of the most turbulent years in the agency’s history, including the 2008 financial crisis. Since 2011, he’s been advising credit unions on communications strategy, public affairs, and crisis management.In this episode, Mark and John discuss:•        Why silence during a crisis creates a dangerous vacuum—and how to avoid it•        The principle of being “first with the truth” and why speed matters•        How to identify and prioritize your key stakeholders during an incident•        The value of tabletop exercises and crisis communication plans•        Real examples from the 2008 financial crisis and recent cyber incidents•        Why your members need to hear that their insured funds are safe—early and often•        Setting up a landing page as a single source of truth during a crisis•        The importance of conducting a postmortem after any incident•        How a crisis can actually strengthen the bond between a credit union and its membersWhether your credit union has a crisis communication plan on the shelf or is starting from scratch, this episode offers practical guidance on how to prepare—and how to perform when it matters most.Connect with John McKechnie:Email: john@mckechniellc.comPhone: 202-997-5816

Mark recaps three standout sessions on stewardship and advocacy, the need to strengthen organizational foundations, and rethinking supervision amid staffing shifts. He highlights proposals to reduce exam burden, extend cycles for well-run institutions, and debate whether stablecoins solve real payment problems. The recurring theme is focusing on core strength rather than compensating for weaknesses.