Risk-Focused Supervision Tools

Ensuring credit unions operate in a safe and sound manner demands an ongoing supervision process. NCUA provides examiners a variety of risk-focused supervision tools to help monitor the risk profile of credit unions beyond regular onsite examination contacts. Examiners should use the monitoring tools described in this section throughout the year to effectively manage their assigned district.

In addition to the monitoring tools described in the Examiner’s Guide, NCUA’s risk-focused supervision approach encourages examiners to use other information sources such as trade associations, credit union leaders, industry news reports, local newspapers, and other examiners.

The primary objective of performing risk-focused supervision activities and contacts is to identify and address emerging risks in a timely manner. Using careful analysis and sound judgment, examiners can identify risks that may adversely affect a credit union’s earnings, net worth, and future viability. This includes identifying potential adverse financial trends, unusual growth patterns, or growing concentrations which may indicate increasing risk levels.

Risks identified by examiners at any point during an examination contact or between exams may require additional attention or supervision, depending on the severity of the risk and its potential impact on the institution.

Examiners are encouraged to stay abreast of developments within their district and in the various industries or communities affecting their assigned credit unions. When an examiner identifies a development that could have an adverse impact on a credit union, they should inform their supervisor as soon as possible and discuss the potential need for additional examination or supervision time.

The primary risk-focused supervision tools available to examiners are:

Examiners may also find it useful to review the following materials:

  • Prior examination reports
  • Board and committee meeting minutes
  • The credit union’s monthly financial statements
  • The credit union’s most recent audit report and workpapers
  • IRR and liquidity management reports
  • Credit risk management reports
  • Call Report Custom Query Tool
  • Operational policies and procedures (with respect to activities like the credit union’s lending, collections, or strategic plans)
  • Electronic information sources such as the credit union’s website
  • Supervisory committee or other internal/external independent reviews

Further, there are numerous reports available on NCUA Central (see various folders under Reporting Services Reports) that examiners may find useful for supervision efforts, including: