NCUA Examiners to Prioritize Credit, Liquidity, Market Risk in 2025

Credit, liquidity, and market risks are among NCUA’s top supervisory priorities in 2025, according to a letter to credit unions (25-CU-01) sent Tuesday by NCUA Chairman Todd Harper. He noted 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.”

The priorities are:

• Credit risk: Examiners will continue to review a credit union’s lending and related risk-management practices, including 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.
• Balance sheet management and risk to earnings and net worth: Among the most significant are credit, liquidity, and market risk. Examiners will weigh the current and prospective sources of earnings and the composition of net worth relative to your credit union’s approved plans and thresholds.
• Cybersecurity: Examiners will continue to use the information security examination procedures to assess whether credit unions have implemented robust information security programs.
• Consumer financial protection: with examiners focusing on compliance in overdraft programs, fair lending, Home Mortgage Disclosure Act (Regulation C), Military Lending Act. Electronic Fund Transfer Act (Regulation E).

The letter also indicates NCUA will update its exam flexibility initiative to provide an extended exam cycle for credit unions over $1 billion in assets where the NCUA rated the credit union a CAMELS composite 1 or 2 with no change in CEO since the last examination. These institutions will now be eligible for a 12- to 16-month exam cycle.

America’s Credit Unions and its legacy organizations have consistently advocated for well-run, low-risk credit unions to be eligible for an extended cycle. They pushed for this change, and NCUA staff indicated during November’s budget briefing that the extended exam cycle for eligible federal credit unions will be shortened from 14 to 20 months to 14 to 18 months.

The agency will also continue conducting the defined scope Small Credit Union Exam Program in most federal credit unions with assets of $50 million or less, and risk-focused examination procedures for all other credit unions.

Read the full letter to credit unions.

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