2015 NCUA Exam Priorites Posted by AVCU on 2:28 PM

On January 6th the National Credit Union Administration sent a letter to federally insured credit unions outlining its 2015 exam priorities. Similar to 2014, cyber-security, interest rate risk (IRR), money servicing businesses (MSB), and liquidity management are at the top of the list of exam priorities. NCUA provided additional details on what specifically is expected of credit unions this year.

Cyber-Security - Examiners will focus on proactive measures credit unions can take to protect their data and their members, including:

• Encrypting sensitive data;
• Developing a comprehensive information security policy;
• Performing due diligence over third parties that handle credit union data;
• Monitoring cyber-security risk exposure;
• Monitoring transactions; and
• Testing security measures.

Interest Rate Risk - A rising interest rate environm
ent could create a liquidity event, with long-term net assets creating unrealized losses, according to NCUA. Examiners are directed to use existing guidance to assess credit unions’ IRR exposure.

Money Servicing Businesses - The agency has issued guidance to examiners about MSBs and steps credit unions can take to mitigate the money-laundering risks posed by MSBs. They include:

• Identifying customers;
• Ensuring that each MSB is registered with the Financial Crimes Enforcement Network (FinCEN) and is in compliance with state and local licensing requirements; and
• Conducting a Bank Security Act/Anti-Money Laundering risk assessment to document the level of risk associated with each MSB account and determine whether greater due diligence is necessary.

See the full NCUA letter to credit unions here.

Source: Northwest Credit Union Association