Outsourcing Becoming Concern For NCUA

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Growing concerns over outsourced relationships has led NCUA to make plans to provide examiners with new guides for investigating risks associated with the growing use of third parties, especially with indirect lending.

Both NCUA Director of Examination and Insurance David Marquis and Executive Director Len Skiles said they are particularly concerned with outsourced relationships. With indirect lending, Marquis said, "I have particular concerns with issues of security and where the collateral lies. The problem, quite frankly, is we're seeing increased frequency of credit unions not performing due-diligence in this area."

NCUA officials also expressed concern over numerous other issues, including the composition of loan portfolios (see coverage, page 18).

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