NCUA Highlights Supervisory Priorities For 2022 Exams – Finance and Banking

The National Credit Union Administration (“NCUA”) highlighted supervisory priorities for the
2022 examination program.

In a letter to its members, the NCUA stated that, due to ongoing
COVID-19 concerns, credit union examinations will continue to be
conducted primarily offsite, and its “flexible examination
scheduling policy” remains in place for 2022.

NCUA stated that its examiners will focus on, among other
things:

• credit risk management – adjustments made to lending programs
  that address financial hardships, and policies related to loan
  workout strategies, risk-management practices, and programs for
  distressed borrowers under the CARES Act and the Consolidated
  Appropriations Act;




• information security – ensuring cybersecurity preparedness, as
  well as evaluating risks from electronic payment platforms;




• Bank Secrecy Act (or “BSA”) and Anti-Money Laundering
  Act (or “AML”) – compliance with updated
  requirements;




• capital adequacy and risk-based capital rule
  implementation;




• loan loss reserving – verifying the Allowance for Loan and
  Lease Losses calculation;




• consumer financial protection – compliance related to COVID-19
  issues, fair lending, the Servicemembers Civil Relief Act, the Fair
  Credit Reporting Act, and overdraft programs;




• loan participations – confirming that loan participation
  transaction risks have been correctly evaluated;




• LIBOR – ensuring that credit unions are properly transitioning
  away from LIBOR; and




• CAMELS – compliance with the new “S” component for
  sensitivity to market risk in the existing CAMEL rating system,
  effective as of April 1, 2022.

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