Supervisory letter looks at supervision of CDFI CUs

Sept. 27, 2016 -- Information about the supervision of credit unions recognized as “community development credit unions” (CDFIs) has been provided by NCUA to its staff, with the intent of establishing “a consistent framework for the exam and supervision process.”

Dated Sept. 19 (and released Monday by the agency), NCUA Supervisor Letter SL No. 16-01 applies to all CDFI credit unions. It includes background, exam and supervision procedures, grant accounting guidance, and a list of previously issued NCUA guidance related to CDFI CUs. It also includes an attachment dealing with accounting for CDFI CUs.

The agency wrote that it recognizes and accepts that there are “risks inherent” in the business model of CDFIs. “A CDFI-certified credit union, much like a low income designated credit union, may have a very different risk profile than other credit unions,” the agency guidance states. “A CDFI-certified credit union often needs to assume different risks in the types of member service programs they employ to achieve their community development mission. NCUA’s focus is not on avoiding these risks, but rather on ensuring CDFI-certified credit unions adequately manage the risks.”


NCUA Supervisory Letter 16-01: CDFI-certified CU supervision