Today the NCUA released a Supervisory Letter for Enterprise Risk Management (ERM). In the cover letter, Chairman Debbie Matz indicates that the approach taken for effective risk management can vary from credit union to credit union.
“NCUA’s examination process requires examiners to gauge the overall effectiveness of a credit union’s risk management process based on an evaluation of several components, as well as an understanding that each credit union’s approach will be tailored to its individual business strategy and risk tolerance.”
The NCUA Letter can be found here: https://www.ncua.gov/files/supervisory-letters/LCU2013-12_SupervisoryLetter.pdf
In the actual Supervisory Letter, the NCUA concludes:
“ERM is a broadly defined and evolving concept that, at its core, presents potential benefits to larger, more complex credit unions. Natural person credit unions are encouraged to explore how ERM might benefit their organization, but are not required by regulation or supervisory expectation to implement a formal ERM process. Examiners are encouraged to familiarize themselves with the concept and basic components of ERM to aid in their evaluation of a credit union’s ability to identify, measure, monitor, and control (i.e., manage) existing and potential risks in their operations.”
For information on Quantivate’s ERM module and helpful information see the below: