The NAFCU Journal November-December 2019 - 28

"Partnership should be the mindset"
when preparing for an NCUA exam, says
Cory Bearden, vice president of audit/
compliance at VITAL Federal Credit
Union in Spartanburg, S.C., and a former
NCUA examiner. "There are a lot of very
smart people at NCUA who have seen
many ways of doing things. There may
be things you don't know about that can
help your business."
Before the examiners arrive, however,
there is value in knowing as much about
your business as possible.

The Internal Audit

"As part of an NCUA exam, your examiners will often start with the credit union's
own internal audit reports," Wanamaker
says. A credit union's audit gives examiners a sense of what the institution has
already assessed as well as the areas it has
already identified as needing improvement. "NCUA exams are a point in time,"
Wanamaker continues. "The internal
audit shows diligence all year long.
"The audit function can be handled
by an internal staff auditor, or it can
be outsourced; due to the diversity
of knowledge that's needed, it can be
difficult to have internal staff with

''

There are a lot of very smart
people at NCUA who have seen
many ways of doing things.
There may be things you don't
know about that can help
your business.

''

- CORY BEARDEN, VICE PRESIDENT OF AUDIT/COMPLIANCE,
VITAL FEDERAL CREDIT UNION

a full knowledge base," she notes. At
FMFCU, they outsourced that function when their auditor retired. "The
outside auditors focus on operational
compliance areas - lending, loan
servicing, deposit services, TRID, Reg
Z, Reg E, courtesy overdraft, etc.," she
says. Those reports are presented to
the supervisory committee throughout the year, demonstrating that the
credit union considers compliance and
internal controls to be critical parts of
its overall operations.  
"Internally," Wanamaker continues,
"every department also has qualitycontrol aspects to cover in their
individual business units. Mistakes

happen - especially when you have
member-facing staff who are 'jack-of-alltrades' - and having a strong qualitycontrol process catches them, hopefully,
before they negatively impact members."
In Bearden's experience, credit unions
that had done their internal homework fared better. "We seemed to see a
correlation between financial success
and those credit unions that knew their
own performance metrics - and those
of their peers."

Priority Management

Each year, the NCUA releases a list of
"supervisory priorities" that highlights
key areas on which examiners will concentrate their attention. These priorities
are linked to areas of highest risk, new
products and services, and compliance
with new or amended federal regulations. In 2019, those priorities included
Bank Secrecy Act (BSA) compliance,
Current Expected Credit Losses (CECL),
and information systems and assurance. Along with the list of priorities,
the NCUA provides links to support
resources and an online version of the
agency's examiner's guide for reference.
"The supervisory priorities are essentially a heads-up, so there aren't any big
surprises," Wanamaker says.
Brandy Bruyere, NAFCU's vice president of regulatory compliance, says that
these priorities, though they shift over
time, are not random. "Credit unions
should understand that NCUA's priorities aren't created in a vacuum," she
says. But focusing only on the published
priorities of a given year is a mistake.

28

THE NAFCU JOURNAL  NOVEMBER-DECEMBER 2019



The NAFCU Journal November-December 2019

Table of Contents for the Digital Edition of The NAFCU Journal November-December 2019

The NAFCU Journal November-December 2019
Contents
Conferences
From the Chair
Washington and Industry Briefs
The Bottom Line
Welcome, New Members
Leading the Charge
Test for Success
Test for Success
Executive Spotlight
Management Insight
Compliance Central
Inside NAFCU Services
From the President’s Desk
The NAFCU Journal November-December 2019 - The NAFCU Journal November-December 2019
The NAFCU Journal November-December 2019 - Cover2
The NAFCU Journal November-December 2019 - Contents
The NAFCU Journal November-December 2019 - 2
The NAFCU Journal November-December 2019 - Conferences
The NAFCU Journal November-December 2019 - From the Chair
The NAFCU Journal November-December 2019 - 5
The NAFCU Journal November-December 2019 - Washington and Industry Briefs
The NAFCU Journal November-December 2019 - 7
The NAFCU Journal November-December 2019 - The Bottom Line
The NAFCU Journal November-December 2019 - 9
The NAFCU Journal November-December 2019 - 10
The NAFCU Journal November-December 2019 - 11
The NAFCU Journal November-December 2019 - 12
The NAFCU Journal November-December 2019 - Welcome, New Members
The NAFCU Journal November-December 2019 - 14
The NAFCU Journal November-December 2019 - 15
The NAFCU Journal November-December 2019 - 16
The NAFCU Journal November-December 2019 - 17
The NAFCU Journal November-December 2019 - Leading the Charge
The NAFCU Journal November-December 2019 - 19
The NAFCU Journal November-December 2019 - 20
The NAFCU Journal November-December 2019 - 21
The NAFCU Journal November-December 2019 - 22
The NAFCU Journal November-December 2019 - 23
The NAFCU Journal November-December 2019 - 24
The NAFCU Journal November-December 2019 - 25
The NAFCU Journal November-December 2019 - Test for Success
The NAFCU Journal November-December 2019 - 27
The NAFCU Journal November-December 2019 - 28
The NAFCU Journal November-December 2019 - 29
The NAFCU Journal November-December 2019 - 30
The NAFCU Journal November-December 2019 - 31
The NAFCU Journal November-December 2019 - Test for Success
The NAFCU Journal November-December 2019 - 33
The NAFCU Journal November-December 2019 - 34
The NAFCU Journal November-December 2019 - 35
The NAFCU Journal November-December 2019 - 36
The NAFCU Journal November-December 2019 - 37
The NAFCU Journal November-December 2019 - 38
The NAFCU Journal November-December 2019 - 39
The NAFCU Journal November-December 2019 - Executive Spotlight
The NAFCU Journal November-December 2019 - 41
The NAFCU Journal November-December 2019 - Management Insight
The NAFCU Journal November-December 2019 - 43
The NAFCU Journal November-December 2019 - Compliance Central
The NAFCU Journal November-December 2019 - 45
The NAFCU Journal November-December 2019 - Inside NAFCU Services
The NAFCU Journal November-December 2019 - 47
The NAFCU Journal November-December 2019 - From the President’s Desk
The NAFCU Journal November-December 2019 - Cover3
The NAFCU Journal November-December 2019 - Cover4
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