Wire Transfers

Credit unions use wire transfers to send funds from one institution to another. Wire transfers present a heightened degree of risk depending on various factors, such as the dollar volume of transactions, geographic location of originator and beneficiary, and whether the originator or beneficiary is an existing member. Credit unions rely on sound policies, procedures, and controls to manage risk associated with wire transfers. The size and complexity of the credit union will determine the extent of controls needed.

To review the existence and effectiveness of controls for the wire transfer application, examiners:

• Review written wire policy and procedures

• Determine the method(s) used to wire funds—for example, corporate credit unions, local bank, Federal Reserve

• Review wire controls—for example, access restrictions, limits, call back procedures, and segregation of duties for initiation, validation, execution, and reconciliation

• Review a sample of wire orders to confirm compliance with internal controls

• Review unusual wire activity to determine if additional reviews are warranted

• Determine if the supervisory committee, internal auditor, or other designated third party has performed a documented internal review of wire transfers

• Determine if the credit union’s bonding company has recently performed a risk management analysis, which may include a review of controls over wire activities

Last Updated on October 14, 2021