To review credit union management, examiners may consider the following procedures:

• Review the credit union’s strategic and business plans and analyze management’s integration of risk management with planning and decision making;

• Review responsiveness to examination and audit suggestions and recommendations, and assess corrective actions taken to address risks identified in prior examinations and audits;

• Review the minutes of regular and special board and committee meetings for significant items;

Credit unions should have in place a risk management program that includes a strategic plan with implementing policies, procedures, and internal controls necessary to manage the risks inherent in their operations. Successful risk management programs rely on credit union management to employ sufficient staff and have available necessary resources to identify, measure, monitor, and control existing and potential risks.

Prompt corrective action for “significantly undercapitalized” credit unions.

(a) Mandatory supervisory actions by credit union. A federally-insured credit union which is “significantly undercapitalized” must—

(1) Earnings retention. Increase net worth and transfer earnings to its regular reserve account accordance with §702.201;

(2) Submit net worth restoration plan. Submit a net worth restoration plan pursuant to §702.206;

Pages