Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Third-Party Vendors, Risk Management Addressed In NCUA Report
ALEXANDRIA, Va. (9/12/13)--Potential National Credit Union Administration actions to address third-party vendor issues and tips on understanding risk management are among the topics addressed in the latest edition of The NCUA Report.

In the Report, NCUA Chairman Debbie Matz reveals that the agency "will be asking Congress for authority over third-party vendors." Such vendors, she noted, could threaten credit unions' safety and soundness.

Matz in her monthly column recalled the situation that American International Group (AIG) faced during the economic crisis, when a small, unregulated division of that huge firm crashed the company. "Dangers to the credit union system could be lurking in such regulatory blind spots," Matz wrote.

Matz also highlighted other actions the NCUA is taking in the aftermath of the financial crisis. Those actions include:
  • Working to reduce concentration risks;
  • Addressing credit union due diligence standards; and
  • Strengthening risk-based capital requirements.
The NCUA and credit unions must also work to be forward-looking and anticipate emerging risks sooner, she emphasized.

Risk management was also the topic of the NCUA newsletter's Region III Report. In that article, the NCUA says it is developing guidance for examiners that discusses the objectives and benefits of using enterprise risk management (ERM) and its relationship to sound business practices that drive the overall risk management process.

The regulator says it does not consider ERM to be a regulatory requirement. Having a strong, internal control environment, combined with a comprehensive risk assessment process is regarded as sufficient, the NCUA wrote.

The Report notes that some credit unions have developed their own ERM programs internally, while others have hired outside consultants to help them implement policies and procedures.

"Either way, ERM should provide clear and concise risk information across the credit union and allow for prudent decision-making in a timely manner," the agency wrote.

Use the link for the full NCUA Report.


RSS print
News Now LiveWire
St. Louis treasurer taps #creditunion to serve unbanked #NewsNow http://t.co/lWtcezJOej
9 hours ago
.@CUNAMutualGroup has committed $35K to @trustdotcoop over the next year to suppor the future of #creditunions.
10 hours ago
.@madison_mag gets the cooperative scoop from @SummitDoMore's @kimsponem http://t.co/RxSCeSegie
10 hours ago
.@VantageWestCU emeritus chairman Whittaker inducted into @DCUC_HQ Hall of Fame http://t.co/dpeP4ME49U
12 hours ago
Australian newspaper covers Gen Y tips from @ServusCU at @WOCCU conference http://t.co/xqmLfZVwaI
12 hours ago