NCUA Boardroom. Credit/NCUA
NCUA Board Chairman Todd Harper published the first supervisory letter in 2025 on Tuesday to credit union leaders listing the supervisory priorities for NCUA examiners this year. Harper stated the “priorities focus on the areas posing the highest risk to credit union members, the credit union industry and the National Credit Union Share Insurance Fund.”
According to the letter, the four priorities included the following:
1. Credit risk: NCUA examiners will continue to review credit union’s lending and related risk-management practices. This priority will include reviewing the sufficiency of loan underwriting standards, collection programs, Allowance for Credit Losses reserves, charge-off practices, management and board reporting, and management of any concentrations of credit risk. To the extent possible, examiners will also review credit unions' third-party risk-management practices when lending, servicing or collection functions are outsourced.
2. Balance sheet management and risk to earnings and net worth: “Credit unions are exposed to various risks affecting their earnings and net worth,” the letter stated. “Among the most significant are credit, liquidity and market risk. These risks are tied to the institution’s ability to manage its financial assets and liabilities and have a direct effect on earnings and net worth.”
It also stated, “For credit unions, the primary market risk element is interest rate risk. Interest rate changes can affect the income credit unions generate from their lending and funding activities, which can affect the credit union’s ability to build net worth. Loan losses can also diminish a credit union’s earnings and net worth.”
3. Cybersecurity: “Cybersecurity remains a top supervisory priority as cyberattacks against all industries, including credit unions and the vendors they use, become more frequent and sophisticated. The risk of a cybersecurity incident rises as dependence on networks and technology increases. A loss or compromise in confidentiality, integrity or availability of systems or information may lead to fraud, as well as financial and reputational loss. It is thus crucial for your credit union to manage its information security programs and continuity of operations plans proactively, and to conduct ongoing due diligence of your critical service providers,” the letter stated.
“In 2025, examiners will continue to use the information security examination procedures to assess whether your credit union has implemented robust information security programs to safeguard both members and the credit union itself.”
4. Consumer financial protection: “The NCUA will continue to prioritize reviewing compliance with consumer financial protection laws and regulations during every federal credit union examination. In addition to reviewing any areas specific to your credit union identified during the risk-focused examination scoping process, in 2025 examiners will, in particular, assess your credit union’s compliance with the following consumer financial protection areas.” Those areas include:
- Overdraft programs;
- Fair lending;
- Home Mortgage Disclosure Act and Regulation C;
- Military Lending Act; and
- Electronic Fund Transfer Act and Regulation E.
Harper also listed the Minority Depository Institution (MDI) Preservation Program as a supervisory priority in 2025. “The NCUA recognizes the important role that MDIs play in the credit union system and in the daily lives of the members they serve across the country. The NCUA is committed to supporting the ongoing success of MDIs, including the need to support some MDIs more or differently than other credit unions. Examinations will consider the unique strategies and member needs of MDI credit unions,” the letter stated.
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Michael Ogden
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.
