In February, the Division of Credit Unions (DCU) released Bulletin B-21.01, Strategic Initiatives and Exam Focus for 2021. The Bulletin includes updates of the DCU’s 2020 strategic initiatives and objectives, as well as their exam focus for 2021.
In 2020, the DCU restructured its examiners into four teams- three devoted to performing safety and soundness exams and one for specialty exams. The DCU also conducted more offsite examinations and implemented the use of the NCUA’s MERIT Exam Software Program. For IT security exams, the Division converted to the Information Technology Risk Examination (InTREx) program.
For 2021, the DCU’s 2021 exam focus includes:
- Allowance for Loan and Lease Losses, including adjustments for COVID-19
- Changes in Asset Quality, including pandemic related programs
- Potential Interest Rate Risk Changes, with focus on credit union overall strategic and business plans to be deployed during the pandemic
- Liquidity, including the effects of stimulus programs
- Network Security, including the current remote access environment
- Comprehensive Review of New Program Offerings and Vendors, to identify proper due diligence and properly managed and controlled risks
- Consumer Compliance
As in previous years, the safety and soundness review for consumer compliance will include:
- Bank Secrecy Act
- Loss mitigation policies and procedures – loan forbearance modifications and skip a pay
- Updated CFPB rules for Qualified Mortgages (QM) and the Ability to Repay (ATR)
- Regulation E and overdraft procedures
Stand-alone consumer compliance exams will focus on:
- Compliance Management Systems
- Third-Party Due Diligence
- Truth in Lending/Real Estate Settlement Procedures Act
- Fair Credit Reporting Act
Compliance Services Group can help you succeed in your consumer compliance endeavors. Featuring skilled auditors and consultants knowledgeable in all areas of consumer compliance, we have developed examinations and reviews to help ensure that your institution is in compliance with the ever-evolving requirements.
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Please be advised that CSG provides financial services compliance audit and consulting services to our clients. The services that we provide include certain tasks that may be characterized as “law-related services” under Rule 5.7 of the Rules of Professional Conduct governing lawyers. Since some of our employees are lawyers with an active bar license but are NOT engaged in the private practice of law, that Rule requires us to make disclosures clarifying that the services we perform may be law-related services, but they are not legal services. Because they are not legal services, those services and our relationship will not be governed by the Rules of Professional Conduct that guide the client-lawyer relationship, such as rules applicable to privileged communications and prohibitions of conflicts of interest. Notwithstanding this disclaimer, we will continue to govern our relationship with you using reasonable ethical and professional standards that are expected to meet your expectations.