NCUA has released its list of supervisory priorities for 2018 in a letter to federally insured credit unions (17-CU-09). A CUNA CompBlog entry provides information on the letter, which is also available on NCUA’s website.
Cybersecurity Assessment. NCUA will start using the Automated Cybersecurity Examination Tool (ACET), designed to assist the agency in assessing the level of cyber preparedness across financial institutions. Examiners will first use the tool to assess credit unions with over $1 billion to establish a baseline. ACET will be used throughout 2018 as a test comparison among institutions to ensure that measures/scales are appropriate for smaller less complex institutions. NCUA encourages credit unions to continue to self-assess cyber preparedness using the FFIEC’s Cyber Assessment Tool;
Bank Secrecy Act Compliance. Examiners are required to review credit unions’ compliance with the Bank Secrecy Act and complete the related examination questionnaire at every examination. The Customer Due Diligence regulations become effective May 11, and examiners will begin assessing compliance with this new regulation in the second half of 2018;
Internal Controls and Fraud Prevention. Examiners will continue to evaluate the adequacy of credit union internal controls, as well as overall efforts to prevent and detect fraud;
Interest Rate and Liquidity Risk. In January 2017 examiners began using a in credit unions. As not all credit unions were examined in 2017, some credit unions will be examined under revised interest rate risk supervisory tool and examination procedures to assess interest rate risk management practices for the first time in 2018. Examiners will also increase their focus on liquidity risk management practices given the emerging trends related to on-balance-sheet liquidity.
Automobile Lending. Examiners will apply additional scrutiny to credit unions with material exposure to higher risk forms of auto lending. Specifically, examiners will focus on portfolios with the following concentrations:
Commercial Lending. Examiners will continue to focus on the credit union’s commercial loan policies and procedures along with assessing the effectiveness of the credit union’s risk management processes. Credit union officials should be prepared to ensure the policy, practices and staffing are appropriate for the type of commercial loans offered.
Consumer Compliance, which includes examiner reviews of: