Credit unions should perform thorough due diligence to determine their risk exposure from using corporate credit unions compared to using third-party firms, the NCUA advised credit unions in a letter sent last week.
The letter advises credit unions to have policies that define their level of risk tolerance. In addition, when deciding on a payment service provider, credit unions should evaluate the monitoring costs. This includes staffing, capital expenditures and technological investment.
"Payment system products and services expose credit unions to numerous risks – including legal, compliance, strategic, operational, credit, and liquidity risks. Moreover, they require many 'behind the scenes' processes," NCUA Chairman Debbie Matz wrote.
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The agency plans to hold a webcast on the subject and workshops for credit unions up to $50 million in assets.
The letter and checklist may be seen here.
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