LAS VEGAS – Board members were reminded that beginning in January examiners will begin reviewing credit union risk assessments and that in the board room, credit union need to be prepared to comply.
The Federal Financial Institutions Examination Council (FFIEC) has issued new online authentication guidance that stresses and reinforces the importance of performing periodic risk assessments.
As a result, volunteers are being urged to ensure their credit unions implement a formal risk assessment process to identify, measure and control risks that threaten their institution’s net worth and earnings.
Speaking to a CUES Directors Conference breakout session audience, Ann Davidson, senior risk management consultant with CUNA Mutual Group, said the ultimate goal in performing a risk assessment is to reduce internal and external risks to a tolerable level.
In all risk assessments, board members were urged to ask questions that include: what can go wrong, how can it go wrong, what is the potential impact, what preventative measures can be taken and how can it be stopped from happening again or at all? “It’s the board’s responsibility to determine their credit union’s risk tolerance and formally establish it through approved policies,” Davidson said.
