Activity 4: Draft Proposed Policies & Procedures

The board of directors of a federal credit union charter is ultimately responsible for establishing the policies of the credit union. It is through written policies and the resulting procedures that the board of directors and management control the operations of the credit union. Policies and procedures should specifically address the impact on the credit union’s operation and should be reviewed and adjusted annually at minimum, or more often as necessary. The specific policies and procedures required for a new federal credit union will depend on its offerings, membership, and environment.

The organizing group should become familiar with NCUA’s regulations, consumer regulations, and safe and sound business practices to develop many of the policies described in the following paragraphs. NCUA Letters to Credit Unions and the Examiner’s Guide also provide guidance on many of these policy areas. Your mentor credit union(s) may assist with drafting credit union policies. Sample policies obtained from a vendor or other third party should be modified to fit the operations of the proposed federal credit union.

The following paragraphs provide an overview of basic written policies. Some may not be applicable, depending on the new federal credit union’s products and services, membership, and other factors. Under each required policy, you will find references to regulations or guidance to assist you in this process. These references are not intended to be comprehensive. You should refer to the relevant regulations and most recent guidance when developing your policies.

Prudent credit unions will develop robust policies and procedures to address the following:

• Fair Lending and Loans

• Collections

• Loan Charge-Offs

• Allowance for Loan and Lease Losses (ALLL)

• Investments

• Cash

• Bank Secrecy Act / Customer Identification / Customer Due Diligence

• Office of Foreign Assets Control

• Truth-in-Savings

• Director Fiduciary Duties

• Reimbursement

• Asset Liability Management

• Liquidity

• Vendor Management / Third-Party Relationships

• E-Commerce

• Security

• Disaster Recovery and Business Continuity or Resumption

• Privacy

• Identify Theft Red Flags, Credit Report Address Discrepancies, and Records Disposal

• Major Operational Areas

• Advanced Services

Last updated on March 30, 2026