WILLIAMSBURG, Va. — NCUA Vice Chairman Rodney E. Hood urged credit unions to continue employing good risk management strategies to prevent losses in a downward-trending economy.
He addressed the NAFCU Mid-Sized CEO Roundtable in Williamsburg, using this forum to discuss the current financial state of the industry as the agency prepares to release the industry's 2007 year-end data.
Hood provided detailed slides specific to the group, tracking them against the national average for all federally insured credit unions and discussed the trends and points of concern NCUA is tracking. He described how the best practices of risk management can be used to mitigate the effects of a downturn in the economy.
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Hood presented to the roundtable seven areas of risk and their associated issues based on the present state of the economy. Hood told the group that "now more than ever you as credit union leaders along with your boards must focus on doing your due diligence. You can't outsource it or rely on an outside party."
Optimistic about the role credit unions can play in spurring economic growth, Hood encouraged them to continue providing innovative and sound member business lending products while helping their members mitigate risks through balance sheet diversification. Doing this helps member-owners establish viable businesses that create jobs and sustain local communities.
"Credit unions make such a strong positive impact on their surrounding communities, and such constant advancement does not happen without strong leadership, vision, and commitment. In order to evolve, credit union's enterprise risk management programs must keep pace with the ever-changing market. Additionally, credit union management must be properly trained to effectively analyze and implement ERM programs."
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