January 12, 2017

Fraud prevention, MLA compliance among NCUA's 2017 supervisory priorities

Fraud prevention, commercial lending and consumer compliance regarding Military Lending Act changes are new to NCUA's supervisory priorities for 2017, noted in the agency's Letter to Credit Unions 17-CU-01released Thursday.

Noting the challenges smaller credit unions may have with a limited staff, the NCUA said its field staff "will continue to evaluate the adequacy of credit union internal controls, as well as overall efforts to prevent and control fraud."

Also, with the agency's member-business lending rule changes in effect, NCUA staff will evaluate a credit union's commercial loan policies and procedures, the letter says. It adds that a credit union should be able to provide documentation to "support management's ability to effectively monitor and manage its commercial loan portfolio."

The NCUA also said it will be focused on credit union compliance with the MLA, regarding rule changes already in place and others that take effect in October, and the Servicemembers' Civil Relief Act. NAFCU has a host of MLA compliance resources available to credit unions and continues to push the Department of Defense for clarity regarding rule changes.

Also listed as NCUA's 2017 supervisory priorities:

  • credit unions' cybersecurity risk management practices;
  • interest rate and liquidity risk using the NCUA's revised interest-rate risk supervisory tool and new examination procedures; and
  • Bank Secrecy Act compliance.