In a supervisory letter (Letter to Credit Unions: 10-CU-03) released this week NCUA Chairman Debbie Matz encouraged credit union officials "to understand the concentration risk in their credit union's current balance sheet, as well as how strategic plans may affect the level of concentration risk." In the letter, which reflects guidance that the NCUA recently provided to its own examiners, Matz also asked credit union officials to "ensure" that "their risk management practices are commensurate with the level of risk" found on their balance sheets. Additionally, credit unions should "open a dialogue with examiners to consider the suitability of existing risk management practices given the risks inherent in any concentration," and should consult regional, district or state credit union authorities if any other questions arise, Matz said. A recent Federal Financial Institutions Examination Council (FFIEC) advisory on Interest Rate Risk Management can also provide additional guidance, if needed, Matz added.
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3 years ago
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