CUSO activities that are not properly managed and controlled may present significant risk to affiliated credit unions. These risks can be limited to one credit union or can be more widespread depending on the services offered by the CUSO and its geographic footprint. To assess the risk of these third-party vendors, NCUA examiners may perform more detailed CUSO reviews:
|Exam-integrated review||Performed as a component of a credit union exam. The EIC has discretion regarding when to include a review of CUSO activity in the exam scope and if additional operational or financial areas need further analysis. When conducted, examiners collect information about a CUSO by expanding the CUSO Review Questionnaire in AIRES Question.xmls and documenting the results of their review in the Exam Scope.
Examiners may use the information entered on the CUSO Review Questionnaire to support the need for a stand-alone CUSO review.
Focus specifically on the CUSO and are typically conducted in response to recommendations from NCUA or SSA staff. These reviews are performed by a team of examiners and specialists who have experience in the types of services offered by the CUSO being reviewed.
|Follow-up review||Performed at the direction of an SE, DSA director, or other senior NCUA official to determine whether a CUSO has properly acted upon recommended corrective actions outlined in a stand-alone CUSO review report.|
As with risk-focused exams, examiners are expected to tailor procedures according to the size, complexity, and business of the CUSO being reviewed.
CUSO reviews may be performed in conjunction with SSAs. In most cases, the agency that initiates the review will be in charge of the review. Some SSAs have been granted examination and enforcement authority over CUSOs by their state legislatures. Consult with individual SSAs regarding this authority.
An SSA may also conduct a CUSO review independently, and may provide a copy of the resulting report directly to NCUA regional offices. The NSPM contains additional requirements for handling SSA-independent CUSO reports.
Last updated August 9, 2018