Newsroom

March 28, 2013 – Credit unions learned more about how NCUA examiners will evaluate their operational and balance sheet risk management in a free webinar Wednesday led by Tim Segerson, deputy director of NCUA's examination and insurance office.

As NCUA has already noted, the agency is looking especially this year at internal controls, risk mitigation and audit processes. It expects to see robust technology risk management, including risk assessment and classification, and will include enhanced review steps in the second half of 2013, Segerson said.

With respect to balance sheet risk, including interest rate risk and liquidity issues, he said NCUA will expect examiners to evaluate policies and procedures that match the size and sophistication of individual organizations.

Segerson said NCUA plans to issue enhanced guidance in 2013 on member business loan waivers, alternatives to credit ratings as investment evaluation tools and troubled debt restructuring. While there may be some lag, NCUA will also expect credit unions to be up to date in their compliance with generally accepted accounting principles (set by the Financial Accounting Standards Board).

In 2013, credit unions can also expect to see continued emphasis by NCUA examiners on relationships with credit union service organizations, or CUSOs. "NAFCU will be closely monitoring NCUA's examination of credit union CUSO relationships," said NAFCU Regulatory Affairs Counsel PJ Hoffman. "We continue to oppose formal rulemaking relative to CUSOs."

Credit unions can learn more about NCUA's examination focus during a May 1 NAFCU webcast, "A Look Inside NCUA's National Supervision Policy Manual."

Speakers are NCUA Examination and Insurance Director Larry Fazio and David Reed, a partner at Reed and Jolly PLLC.

• NAFCU May 1 webcast