BALTIMORE — Federal examiners at small credit unions will begin looking more closely for internal controls and fraud prevention, an NCUA official said Thursday.
Timothy Segerson, deputy director of the agency’s Office of Examination and Insurance, said that while fraud cases at small credit unions generally do not cost large amounts of money, they frequently represent losses significantly larger than the credit unions themselves.
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Segerson made his remarks to credit union executives at a breakout session at the National Federation of Community Development Credit Union’s annual conference, which runs through Saturday at the Sheraton Inner Harbor Hotel in Baltimore.
“Think the eight million credit union and 20 million fraud loss,” Segerson said, noting that there have been cases of “particularly ugly” small credit union fraud recently.
The NCUA understands that internal controls and other anti-fraud procedures can be challenging for smaller credit unions to implement, Segerson said, adding that examiners will not merely point out faults but will also offer agency information and resources to help credit unions tight up their fraud protection.
For example, the agency will work with managers to help them make sure their auditing firms and auditing professionals are really doing what they are supposed to do, he said. 'They should be working to protect you,” Segerson told attendees at the breakout session.