Insured institutions that exhibit a higher than normal risk profile are monitored more closely. This involves more frequent reporting and examinations to ensure that any deteriorating trends are actively monitored and appropriately managed and addressed by the institution.
Institutions which meet certain risk-based criteria may be placed under Supervision. The Act provides the Supervisor statutory authority to order the institution's board of directors to correct its practices or to refrain from undertaking activities that may harm the institution. DICO follows the practice of providing institutions with time to correct deficiencies in their operations, as identified through examination prior to being placed under Supervision. The length of time provided is dependent on the seriousness of the deficiency and the likelihood of early correction.
In circumstances when an insured institution is in serious financial or operational distress, the Act provides DICO the authority to place it under its Administration. Administration allows the institution to continue to operate under DICO's direct control while providing sufficient time to develop and implement the most appropriate strategy to protect depositors.
When an insured institution goes out of business, a liquidator is appointed to manage the orderly wind up of operations. In most cases, the Corporation is appointed as liquidator in order to pay depositors and wind up the affairs in an orderly manner to minimize the impact on the credit union's members while maximizing the recovery of assets.