NCUA official seal. (Source: NCUA)
The NCUA's board members approved the agency's new Enterprise Risk Appetite Statement on Thursday – a formal document outlining how the agency can align risks and opportunities when making decisions and allocating NCUA resources.
In the 3-0 vote, the board approved the 11-page document prepared by the agency's Enterprise Risk Management Council. According to the NCUA, the statement is designed as a "management tool that provides guidance from agency leadership to managers and staff on the amount of risk the NCUA is willing to undertake in pursuit of its objectives."
The Enterprise Risk Appetite Statement's is focused on achieving several goals, including:
- Communicating guidelines about the levels of risk the NCUA is willing to accept in pursuit of its mission and goals.
- Promoting consistency in understanding, measuring and managing risk across the enterprise.
- Informing agency responses to risks and decision-making to balance limited time and resources.
- Driving a more risk-aware culture.
The NCUA will use the following definitions to articulate its risk appetite:
- Tolerant – the agency is willing to accept significant risks in pursuit of its strategic objectives.
- Moderate – the agency is willing to accept medium risks in pursuit of its strategic objectives.
- Averse – the agency is willing to accept little to no risk in pursuit of its strategic objectives.
"The enterprise risk appetite statement presented today is part of the NCUA's overall management approach. And, I am especially pleased that we will have an averse risk appetite when addressing identified safety and soundness concerns at credit unions," NCUA Chairman Todd Harper said. "This means we will be risk-focused and ready to act expeditiously if needed. I also appreciate that through this statement we will remain focused on ensuring compliance with and enforcement of federal consumer financial protection laws and regulations at credit unions."
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Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
