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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