5 Strategies to Avoid Risk During Your Credit Union's Next Regulatory Examination
Do you know of anyone who looks forward to credit union exams? Do they have NCUA rules and regulations tattooed on their arms? Do they read article after article exploring various credit union compliance resources?

We don’t. And yet, here we are.

Examinations aren’t designed to be pleasant, even when you are doing everything right. When you miss a detail or provide conflicting information, that’s when authorities raise concerns.

Navigating NCUA Rules and Regulations with Ease

Smart strategies make the credit union exam process less painful, while at the same time better protecting your organization from an examiner’s finding (or even worse, a DOR!) from the NCUA. Audit and examination specialists have found the following strategies valuable and worthwhile:

1. Make It Simpler, Not More Complicated

Regulatory examinations are complex. Having to answer just one question from a regulator can generate internal anxiety and a flurry of actions. A full set of credit union exam questions can be a nightmare to organize.

So, the management of your credit union’s response (through either automated or manual activities) should strive to make the process simpler and more transparent.

2. Include the Right People

Make a list of your reliable, go-to experts. Ask yourself who else in the organization could provide insight? Who else needs to review the material before you hand it over? When and how should I involve our outside counsel? Just ask yourself: Who else?

Credit union exams go much more smoothly when you have a knowledgeable, experienced team at the ready.

3. Tightly Restrict Access. Guard Against Broad Legal Discovery

Absolutely include the right people, but share only what they need to see, and involve them only when they need to be involved.

Avoid sharing any sensitive material via email. Doing so could expose all of your email communications to legal discovery.

4. Audit Trail, Audit Trail, Audit Trail

When anything happens, it needs to be auditable. Who authored this response? Who saw it but didn’t provide feedback? Who reviewed this? Who didn’t review this?

All activity should be easily accessible. Having a clear audit trail can help you achieve confidence internally and give regulatory authorities confidence in your process.

5. Leverage the Past

Over the years, your credit union likely has invested a lot of time in examination responses. Don’t reinvent the wheel every time. Leverage the people you’ve relied on in the past. Leverage the responses you’ve produced in the past.

audit checklist

FREE: Audit Checklist for Credit Unions

4 key principles and 13 questions to jumpstart your audit planning. From leading credit unions.

Credit Union Compliance Resources

Regardless of your past experience, credit union regulatory exams can throw curveballs your way. Even after following the five strategies above, you may need to spend a little extra time studying any new NCUA rules and regulations.

You can significantly reduce your risk by investing in audit tools. Credit union software solutions can take a lot of the stress and guesswork out of the process. However, if you’re not ready to pull out the big guns just yet, you can download our NCUA Audit Checklist.

Did we miss a key factor? If you think so, let us know in the comments.

For other great blogs, check out the links below:
The Hidden Risks in Credit Union Regulatory Examinations - and How to Avoid Them
Using the NCUA Examiner's Guide as a Resource to Help Your Credit Union
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Written By Brad Powell

Brad Powell runs Redboard, a company that helps credit unions better respond to regulatory examinations. He has 20 years of experience developing technology for credit unions and financial services companies.
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