NCUA’s Examination Focus
NCUA's review of a risk-based lending programs will focus on safety and soundness issues, regulation compliance, full and fair disclosure, and risk management. At a minimum, examiners will review the following aspects of the risk-based lending program:
- Are policies and procedures documented and comprehensive?
- Are policies and procedures followed?
- Are employees and officials properly trained?
- How well are overall risks managed?
- Are reasonable limits established for higher risk loans?
- Are loan decisions documented in the file?
- Are quality control measures adequate?
- Does the credit union have an adequate tracking system?
- Is the program periodically re-evaluated?
- Is delinquency monitored by loan tier?
- Are collections efforts appropriate, consistent, and timely?
- Does the credit union have a reasonable method for funding the ALL for higher risk loans?
- Has legal counsel reviewed policies and procedures?
- Is a credit scoring system being utilized and is the system periodically re-evaluated or retested to maintain predictive validity?