Preliminary risk assessments do not apply to SCUEP defined-scope exams. SCUEP exams include a review of wire transfer programs in the Transaction Risk tab. See NCUA Instruction 5000.20,
The scope of a wire transfer review depends on:
- The products and services offered by the credit union
- The complexity of operational activity, and
- Risks related to the delivery of product and services.
Examiners should follow the steps below to determine the extent of a review of a credit union’s wire transfer system:
| Step | Potential Risk Impact |
|---|---|
| Determine if the credit union performs international or domestic wire transfers (or both) | International transfers may require a separate wire transfer system or, as in most cases, be outsourced to a third-party servicer; they also increase a credit union’s compliance risk. |
| Determine what system(s) the credit union uses to conduct wire transfers | Different systems present different risk characteristics. |
| Determine which personnel changes at the credit union have an impact on the wire transfer operation | Personnel changes may increase or decrease a credit union’s overall risk posture. |
| Determine if changes in the wire process have been implemented since the last examination or audit |
Products or services that are new to or have been discontinued at a credit union merit an expanded review. Process changes that have not been implemented may increase or decrease a credit union’s overall risk posture. |
| Determine if the credit union has written policies, procedures, and risk assessments in place for the wire transfer system | The risk impact of these items varies depending on a credit union’s complexity; a less complex credit union may have less comprehensive documentation. |
In addition to these steps, examiners should consult the EPS Risk Overview job aid and document their findings as appropriate. Examiners should pay particular attention to:
- Violations of law, regulations, and third-party agreements;
- Significant issues that warrant inclusion in the exam report; and
- Potential impact of the observations on the CAMELS and risk ratings.
Examiners may refer to Letter to FCUs 02-FCU-09, Risk-Focused Examination Program, for broad guidance on how to assign risk levels.
The information obtained during the scope development, combined with the level of risk assigned during the preliminary assessment, determines the extent of review necessary to complete an exam of the wire transfer system.
Last updated October 14, 2021
