NCUA announces 2013 Supervisory Focus
February 7 In a letter to all FICUs, NCUA released their 2013 Supervisory Focus last week. In the letter, NCUA explains examiners will look at credit unions' ability to manage risk in the following areas:
1) Adoption of New Technology - Examiners will review how well credit unions put risk management controls when putting in new technologies such as online banking and social media.
2) Balance Sheet Management - Examiners will explore whether credit unions are appropriately managing earnings and capital without adding undue levels of interest rate, liquidity and credit risk.
3) Operational Risk - Examiners will look at credit union's capability related to controlling operational risks and maintaining sounds internal controls systems.
4) Interest Rate Risk - Examiners will look at the credit union's ability to manage interest rate risk and liquidity risk - especially when there are high levels or long- term assets funded by short- term funds.
5) Other Assets - Examiners will look at whether credit unions are managing the unique risks associated with unconventional products such as investments in credit union funded benefit plans and private student loan funds.
The letter also indicates that a priority for NCUA is to enhance clarity for credit unions and examiners by issuing guidance in areas such as Member Business Lending, Credit Ratings and Troubled Debt Restructure. To see the NASCUS' full summary, click here.