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NCUA 2017 Supervisory Priorities

In case you missed it, the NCUA has published its first Letter to Credit Unions of 2017.  Letter 17-CU-01 includes an overview of the regulator’s Supervisory Priorities for 2017.

If you’ve been keeping up with communications from the agency, the topics they intend to focus on are probably not too big of a surprise.

Cybersecurity continues to remain a focus of the NCUA in 2017, and based on the Letter, I would expect that to continue. Not only does the regulator plan to increase its emphasis on cybersecurity, it plans to use a structured assessment process to do so. They expect to complete that process late this year and have promised to keep us informed as changes occur. In the meantime, credit unions should continue to use the FFIEC’s Cybersecurity Assessment Tool to evaluate risk. Additional resources can be found on the NCUA website.

Another topic that remains on the list for 2017 is BSA. Again, not too much of a surprise here. I imagine BSA will remain on this list for the foreseeable future.

Interest Rate and Liquidity Risk continue to be a priority in 2017 as well. Rates are slowly beginning to increase, and the Fed anticipates raising their rates again throughout the year.

Commercial Lending is new to the list of priorities this year, on the heels of the newly effective Member Business Loans: Commercial Lending rule. The regulator’s field staff will be especially focused on credit union commercial loan policies and procedures and will be assessing the risk management processes associated with the credit union’s portfolio. Letter to Credit Unions 16-CU-11, which was published back in November, may be an excellent resource to assist you with your commercial lending program before examiners are on-site.

And finally, my favorite topic – Consumer Compliance, will include a focus on October’s changes to the Military Lending Act. As a reminder, the rule featured a two-part implementation schedule which provides for additional changes related to credit cards becoming effective in October of this year.

If there is anything that we can do here at PolicyWorks to help you with your credit union’s 2017 compliance priorities, or pretty much anything else, you know where to reach me. Thanks for reading.

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