To help identify, measure and control risks that threaten net worth and earnings, boards must ensure credit unions implement a formal risk assessment process.
That was the advice shared by Ann Davidson, senior risk management consultant at CUNA Mutual Group, speaking at a CUES Directors Conference session Wednesday in Las Vegas.
“Risk can never be entirely eliminated, but using risk assessments as part of an enterprise-wide risk management strategy will help credit unions continue to provide meaningful products and services to members while including necessary safeguards to protect the credit union,” Davidson said.
A robust risk assessment process forms the foundation for an enterprise risk management process, which is becoming increasingly important due to increased regulatory requirements, Davidson noted.
She pointed to the Federal Financial Institutions Examination Council's new online authentication guidance in issued in June that stresses and reinforces the importance of performing periodic risk assessments. Examiners will start reviewing credit union controls under the updated guidance beginning in January 2012.
Davidson said risk assessments should answer these questions: What can go wrong? How can it go wrong? What is the potential impact? What preventative measures can be taken? And how can it be stopped from happening again or at all?
“It's the board's responsibility to determine their credit union's risk tolerance and formally establish it through approved policies,” Davidson said.
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
