Letters to Credit Unions No.: 17-CU-01
Supervisory Priorities for 2017
January 2017

NCUA has issued its first Letters to Credit Unions (LTCU) of 2017. As is the agency’s custom, the first LTCU of the year establishes NCUA’s supervisory priorities in 2017:

  1. Cybersecurity Assessment

    NCUA continues to encourage credit unions to use the Cybersecurity Assessment Tool to bolster their cybersecurity and cyber risk management processes. NCUA is developing a structured cyber assessment process for its examiners for use by late 2017. Credit unions are reminded of resources available thru NCUA’s web site: Cybersecurity Resources website.

    NASCUS note: Cybersecurity training is available at the NASCUS/CUNA Cybersecurity Symposium, June 5 and 6 in San Diego, CA.

  2. Bank Secrecy Act Compliance

    NCUA requires its examiners to review credit unions’ compliance with the Bank Secrecy Act and to complete the related examination questionnaire at every examination. In 2017, NCUA will once again focus on credit unions’ relationships with money services businesses (MSBs) and other high risk accounts. As outlined in LTCU 14-CU-10, Identifying and Mitigating Risks of Money Service Businesses, credit unions banking MSBs or other high-risk members need enhanced procedures in place to manage those relationships in compliance with the BSA.

    NASCUS note: In depth BSA/AML training for examiners and credit unions is available at the CUNA/NASCUS BSA Conference, November 12-15, Las Vegas, Nevada.

  3. Internal Controls and Fraud Prevention

    NCUA reiterates its concerns with fraud in smaller credit unions and notes that NCUA examiners will continue to evaluate the adequacy of credit union internal controls.

  4. Interest Rate and Liquidity Risk

    NCUA announced new interest rate risk (IRR) exam procedures in LTCU 16-U-08 Revised Interest Rate Risk Supervision. These procedures were effective on January 1, 2017. NCUA will also emphasize evaluating liquidity risk in credit unions.

  5. Commercial Lending

    NCUA’s revised Part 723, Member Business Loans; Commercial Lending, became effective January 1, 2017. Credit union officials should be prepared to provide documentation to support management’s ability to effectively monitor and manage its commercial loan portfolio. NCUA’s online Examiner’s Guide provides guidance on commercial lending and on NCUA’s supervisory expectations. See also LTCU 16-CU-11, Member Business Loans Guidance Added to Examiner’s Guide.

  6. Consumer Compliance

    NCUA examiners will also focus on consumer compliance, in particular the Military Lending Act and Servicemembers’ Civil Relief Act. Additional information on the Military Lending Act, see LTCU 16-CU-07, Military Lending Act Examination Approach.

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