Information on the Risk-Focused Examination Program
The examination approach focuses on seven operating risk factors. The seven
risk areas we concentrate on are:
- Credit Risk – the risk of non-repayment where the credit union
invests or loans funds.
- Interest Rate Risk – the risk that changes in
market rates will not be adequately managed to maintain an appropriate net
- Liquidity Risk – the risk your credit union will not
be able to liquidate assets quickly and with minimal loss in value to meet
- Transaction Risk – the risk that fraud or errors will
cause a loss to your credit union. This risk is a function of internal controls,
information systems, employee integrity, and operating processes.
- Compliance Risk – the
risk that failure to comply with laws and regulations, prudent ethical standards,
and contractual obligations will harm your credit
- Strategic Risk – the risk that poor business decisions or improper
implementation of strategic goals will reduce your credit union’s earnings
and net worth.
- Reputation Risk – the risk that the credit union’s
public image will be tarnished due to improper actions on the part of officials,
We focused your examination on only those risk areas we determined posed the
greatest risk to your credit union.
The next Credit Union Council Meeting is scheduled for September 25 at the Department of Credit Unions, 109 SW 9th Street, Suite 610, Topeka, KS 66612
Risk Based Capital PCA Comment Letter
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