On January 7, 2020, the National Credit Union Administration (NCUA) released its supervisory priorities for 2020, which are highlighted below:
- Bank Secrecy Act Compliance/Anti-Money Laundering– its focus includes the customer due diligence and beneficial ownership requirements and proper filing of SARs and CTRs.
- Consumer Financial Protection– compliance reviews will, at a minimum, focus on the following:
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- Electronic Fund Transfer Act (Regulation E)- policies, procedures, initial disclosures, and error resolution procedures.
- Fair Credit Reporting Act (FCRA)- policies, procedures, and accuracy of reporting to credit bureaus.
- Gramm-Leach-Bliley (Privacy Act)- overall compliance with the Act in regards to consumers’ non-public personal information.
- Small dollar lending- NCUA Payday Alternative Lending (PALs) rules and interest rate cap and compliance with short-term, small-dollar loan programs that are not PALs.
- Truth in Lending Act (Regulation Z)- practices regarding annual percentage rates and late charges; application of loan payments to principal, interest, fees and other charges; whether the application is consistent with agreements and disclosures; levying late fees; and accurate disclosure of financial charges and annual percentage rates.
- Military Lending Act (MLA) and Servicemembers Civil Relief Act (SCRA)- overall compliance with these acts.
- Credit Risk– NCUA indicated that it planned to focus on loan underwriting standards and procedures and concentration risk exposures.
- Current Expected Credit Losses– plans to implement the new current expected credit losses (CECL) standard, which has a compliance date of January 2023.
- Cybersecurity– completing cybersecurity maturity assessments for credit unions with assets over $250 million and begin these assessments for credit unions with assets over $100 million.
- LIBOR Cessation Planning– planning related to the discontinuance of LIBOR, including identification of all LIBOR related transactions and impact of the discontinuance on various sectors.
- Liquidity Risk– liquidity management and planning, including potential effects of changing interest rates on the market value of assets and borrowing capacity, contingency funding plans to address potential liquidity shortfalls, etc.