Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
CUs Told What Examiners Look For On Risk Management
ALEXANDRIA, Va. (11/13/13/)--The National Credit Union Administration took action Tuesday to clarify its supervisory expectations regarding credit unions' risk management systems.
 
In a Letter to Federally Insured Credit Union (13-CU-12), the agency noted that sound enterprise risk management (ERM) is crucial to the success of any credit union, but effective management can take different approaches at different organizations.
 
Natural person credit unions are not required to implement a formal ERM, said the letter signed by Director Larry Fazio of NCUA's Office of Examination and Insurance, and that is because most do not "possess the size, depth of resources, or range and level of risk exposure to warrant the significant investment necessary" to implement such a program.  
 
However, these credit unions are expected to have processes "sufficient to manage the risk associated with their business model and strategies," the letter reminded.
 
In large and complex natural person credit unions, however, examiners "should ensure the credit union employs a comprehensive risk management approach, which may or may not include a formal ERM program."
 
In all cases, the letter continued, examiners are expected to evaluate a credit union by considering:
  • The credit union's risk exposure, risk appetite, and risk-management strategies;
  • The depth and breadth of potential exposures, including the types of products and services offered by the credit union;
  • The strategic objectives and operational policies, procedures, and controls in relation to potential exposures;
  • Concentration of risk;
  • Risk-mitigating factors;
  • Capability and resources of management;
  • Current and historical performance of management; and,
  • The financial strength of the credit union in relation to assets and activities.
When the letter is posted to the NCUA website, it can be accessed using the resource link below.
Other Resources

Letters to CUs
RSS print
News Now LiveWire
Tech. advances don't dampen consumer #cybersecurity concerns #NewsNow http://t.co/HNn4Hojadv
13 hours ago
.@TheNCUA board unanimously voted today to designate board member Rick Metsger as vice chairman, effective immediately.
14 hours ago
We really want to hear from our readers. Please take the News Now survey: http://t.co/BYiQ5vr5Ob
16 hours ago
Advanced technologies don't quell cybersecurity fears #NewsNow http://t.co/ZJ20bimRvv
16 hours ago
.@CentralMaineCom reports #creditunions have issued thousands of new cards to proactively protect members from Home Depot data breach.
17 hours ago