WASHINGTON — The Centrix Financial Chapter 11 bankruptcy prompted a new reminder from NCUA last week about CUs having "effective controls" in place to handle third-party risk.
Responding to a query from Credit Union Times about Centrix, an NCUA spokesman speaking on behalf of NCUA Chairman JoAnn Johnson noted that with specialized indirect auto lending programs becoming more prevalent the agency "strongly believes it is essential that credit unions have effective controls in place commensurate with the risks."
"Recognizing the risks associated with third-party arrangements, since 2001, NCUA has issued several forms of guidance, such as letters to credit unions and Risk Alerts," said NCUA.
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