CUNA
  • Advocacy
    • Priorities we’re fighting for
    • Actions you can take
  • News
  • Learn
  • Compliance
  • Shop
  • Topics
    • Community Service
    • Compliance
    • Credit Union Hero
    • Credit Union Rock Star
    • Credit Union System
    • Directors
    • Human Resources
    • Leadership
    • Lending
    • Marketing
    • Operations
    • Policy & Issues
    • Sales & Service
    • Technology
  • Credit Union Magazine
    • Buyers' Guide
    • COVID-19
    • Digital Edition
    • Credit Union Hero
    • Credit Union Rock Star
    • Subscribe
    • Advertise
    • Contact
  • COVID-19
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Contact
Learn More about Member Value

News

Member Benefits
Learn more
Learn more about the benefits of membership.
Home » NCUA exam priorities: What to expect in 2020
Compliance Subscribers

NCUA exam priorities: What to expect in 2020

Top issues include BSA/AML compliance, CECL, and credit and concentration risk.

January 15, 2020
Nancy DeGrandi
No Comments
NCUA exam priorities: What to expect in 2020

NCUA has released its supervisory priorities for the year, so you might want to grab some coffee before reading it because the letter is lengthy.

This article summarizes what the letter covers. Like all good compliance professionals, please read NCUA’s letter and take advantage of the resource links it provides.

Here are NCUA’s supervisory concerns and areas of focus for 2020.

BSA/AML compliance

As with every examination, NCUA conducts a Bank Secrecy Act/Anti-money laundering (BSA/AML) review to ensure credit unions meet those obligations.

Customer due diligence (and the beneficial ownership requirements that became effective in 2018) is still an area of focus for 2020. Plus, NCUA will continue to focus on the proper filing of suspicious activity reports (SARs) and currency transaction reports (CTRs) with “proper” (informative and timely) filing.

As you know, SARS and CTRs provide law enforcement, intelligence, and counter-terrorism officials with helpful information to identify and thwart criminal and terrorist activities.

Electronic Fund Transfer Act (Regulation E)

Examiners will want to review your EFT policies and procedures, as well as initial account disclosures, to ensure they cover the requirements under the regulation.

Examiners also will analyze your member error-resolution procedures for when a consumer asserts an error.

Fair Credit Reporting Act

Examiners will review your credit reporting policies and procedures, and will check the accuracy of any reports made to credit bureaus, including the date used as the first delinquency.

Gramm-Leach-Bliley Act (privacy)

How does your credit union protect members’ nonpublic personal information? Do your efforts meet the requirements under the rule?

Small-dollar lending/payday alternative loans

Does your credit union offer a short-term, small-dollar loan outside of NCUA Payday Alternative Loans (PALs)?

If so, examiners will confirm the product meets the requirements under the regulation. If your credit union offers PAL 1 or PAL 2 loans, examiners will determine whether the loans meet the requirements, including interest-rate caps, set forth under the rule.

If you haven’t developed a plan for CECL, start now.
 

Truth in Lending (Regulation Z)

What are your credit union’s practices related to annual percentage rates (APR) and late charges?

Examiners will review how your credit union applies loan payments to principal, interest, fees, and other charges.

Is your process consistent with the written disclosures and agreement? How does your credit union assess late fees? Does it meet the rule’s requirements?

Other areas of focus will be the disclosure of finance charges and APR.

MLA and SCRA

These have been a priority since 2017, so if your credit union has not had a recent Military Lending Act or Servicemembers Civil Relief Act review, this will be an area of focus. 

Credit and concentration risk

There will be increased focus on credit unions’ loan underwriting standards and procedures. Has your credit union properly analyzed borrowers’ ability to meet debt service requirements without excessive reliance on the value of the collateral? 

New this year are enhanced examination procedures and additional quality control requirements for credit unions with high concentrations of loans in participations, commercial lending, indirect lending, and residential real-estate lending.

CECL

Yes, the Financial Accounting Standards Board (FASB) delayed implementation of the Current Expected Credit Losses standard until 2023, but examiners will still review your credit union’s plans for its implementation.

If you haven’t developed a plan yet, start now.

NEXT: Cybersecurity

Previous 1 2 Next
KEYWORDS compliance examination

Post a comment to this article

Report Abusive Comment

Credit Union Magazine - Winter 2020

Winter 2020

Credit Union Magazine’s Winter 2020 edition features CUNA’s 2021 lending outlook, CEO insights on adjusting to the pandemic, and board recruitment strategies.
Digital Edition •  Subscribe

Trending

  • Allowing capitalization of interest is consumer-friendly option

  • Todd Harper appointed NCUA Chairman

  • Compliance: NCUA, agencies issue FAQs on SAR, other AML requirements

Tweets by CUNA_News

Polls

Will you ask employees to receive the coronavirus vaccine?

View Results
More

Champion of America’s Credit Unions

Credit Union National Association is the only national association that advocates on behalf of all of America’s credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • About
  • Careers
  • Contact Us
  • Recommended Websites
  • Privacy Policy

Resources for

  • CUNA Board Members
  • Credit Union Advocates
  • Leagues
  • Press
  • Vendors