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Risk-Focused Examinations and Compliance Risk

17-CU-02 / March 2017
Risk-Focused Examinations and Compliance Risk
Federally Insured Credit Unions
Examination Program
Federally Insured Credit Unions
Risk-Focused Examinations and Compliance Risk

Dear Board of Directors and Chief Executive Officer:

NCUA developed the enclosed Supervisory Letter to provide examiners with guidance about the updated list of compliance risk indicators that are part of NCUA’s Risk-Focused Examination (RFE) Program. The updated list of indicators does not impose any new or higher supervisory expectations for credit unions. The updates to the indicators will take effect on March 31, 2017.1

The enclosed guidance will ensure NCUA examiners continue to take a consistent approach when evaulating a credit union’s ability to manage compliance risk. NCUA staff will also continue to consider such factors as the credit union’s size, complexity, and risk profile as part of their evaluation.

The updated list of indicators builds upon the current set and provides additional guidance for field staff in assigning the compliance risk rating. The compliance risk rating continues to be one of the seven existing risk categories in the RFE Program. For more information, see NCUA’s Letter to Federal Credit Unions 02-FCU-09, “Risk-Focused Examinations.”

I encourage you to review the attached letter. Please contact your regional office or state supervisory authority with any questions on this subject.



J. Mark McWatters
Acting Chairman



1March 31, 2017, is also the effective date for the revised Federal Financial Institutions Examination Council (FFIEC) Uniform Interagency Consumer Compliance Rating System. NCUA, as an FFIEC member agency, has incorporated the principles of the revised Consumer Compliance Rating System into the Compliance Risk Indicators. The supervisory evaluation of compliance is ordinarily conducted as part of NCUA’s risk-focused examinations of credit unions, not as a separate examination.

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