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Breakdown of NCUA supervisory priorities in Compliance Blog
Much like in 2019, in-depth reviews of credit unions' Bank Secrecy Act (BSA) compliance, cybersecurity processes, and preparation for the current expected credit loss (CECL) standard are expected during NCUA examinations this year, according to the agency's 2020 supervisory priorities. NAFCU's Brandy Bruyere dives into what these mean for credit unions during exams this year in a new Compliance Blog post.
“BSA has been on NCUA’s supervisory priorities for several years,” writes Bruyere, NAFCU's vice president of regulatory compliance. “Specifically, NCUA will be looking at compliance with the customer due diligence and beneficial ownership requirements that became effective in 2018.” Bruyere also notes a focus on credit unions’ Suspicious Activity Report and Currency Transaction Report filings.
Additionally, the NCUA will continue to evaluate credit unions’ efforts to prepare for the implementation of CECL. “NAFCU maintains that credit unions should not be subject to CECL and continues to share concerns about CECL’s negative impacts to the Financial Accounting Standards Board (FASB),” writes Bruyere. Late last year, FASB delayed CECL's implementation for credit unions until 2023; NAFCU continues to push for more guidance and relief for credit unions.
Cybersecurity also continues to remain a supervisory priority for the NCUA as the agency "will continue using the Automated Cybersecurity Examination Tool,” says Bruyere. Other areas agency examiners will focus on:
- various consumer protection
sregulations, including some rules that are new to the priorities and others that are repeated from previous years; - liquidity risk;
- concentration risk; and
- the transition from the London Inter-Bank Offered Rate.
NAFCU members can receive a more detailed overview of the 2020 supervisory priorities and a round-up of related sources in an upcoming edition of the NAFCU Compliance Monitor publication. Sign up to receive new Compliance Blog posts.