Credit Union Exam Solutions Presents With Flying Colors

Liquidity RiskHigher interest rates have caused a slowdown in prepayments for some loans and investment holdings, which has resulted in reduced cashflows. Large increases in share balances from 20202022 may result in an increased level of share sensitivity and share roll off as market rates continue to rise.In evaluating the “L” component of the CAMELS rating to determine the adequacy of your credit union’s liquidity risk management framework, examiners will consider the current and prospective sources of liquidity compared to funding needs. Examiners will review your credit union’s liquidity policies, procedures, and risk limits. Examiners will also evaluate the adequacy of your credit union’s liquidity risk management framework relative to the size, complexity, and risk profile of your credit union.Examiners will assess liquidity management by evaluating:The potential effects of changing interest rates on the market value of assets and borrowing capacity.Scenario analysis for liquidity risk modeling, including possible member share migrations (for example, shifts from core deposits into more rate-sensitive accounts).Scenario analysis for changes in cash flow projections for an appropriate range of relevant factors (for example, changing prepayment speeds).The appropriateness of contingency funding plans to address any plausible unexpected liquidity shortfalls.Resources and guidance on liquidity risk can be found in the NCUA’s Examiner’s Guide.https://www.linkedin.com/in/mark-treichel/In 33 years at NCUA I served as Executive Director, Regional Director, Director of Special Actions, Supervisory Examiner, and Principal Examiner. I began at the ground level as an examiner. I rose to the top. As Executive Director I supervised your Regional Director. I know how NCUA thinks and why they think it. I know the examination process inside and out. I know how to communicate and negotiate with NCUA. I know how to get NCUA to YES instead of NO. I can help if you are currently dealing with or thinking about:An examination that did not go as well as you hopedAn Examination that is in process right nowAn examination that is coming soonResponding to an NCUA or state examinationAssessing a letter to you from your Regional Director or State RegulatorSeeking NCUA or State Regulator approval for an action you desire to takeAssessing actions you will take in response to a Document of ResolutionReceiving a Letter of Understanding and AgreementDocument of Resolution (DOR) IssuesExaminer FindingsSupplementary FactsCAMEL Code DowngradesCapital AdequacyAsset QualityManagement CodeEarningsLiquidity CodeSensitivity CodeCommercial Lending MBL IssuesInterest Rate Risk (IRR)Net Economic Value (NEV)Secondary CapitalSubordinated DebtExit Conference / Joint Conference ChallengesFair Lending Exam IssuesField of Membership (FOM) ExpansionsCECL IssuesAppealsReputation RiskNet Worth Restoration Plans (NWRP)Credit riskInterest rate riskLiquidity riskTransaction riskStrategic riskReputation riskCompliance riskNCUA's Large Credit Union ProgramTransition to the Office of National Examinations and Supervision (ONES)CFPBStrategic PlanningSafety and SoundnessSupervisory CommitteeCorporate GovernanceBank Secrecy Act (BSA)NCUA Examination PrioritiesNCUA's Examination GuideNational Supervision Policy ManualBank PurchasesLetters to Credit UnionsNCUA Regulations Reach out today to discuss how I can assist you and your credit union.