The National Credit Union Administration (NCUA) currently has no examination authority over third-party vendors. NCUA is the only Federal Financial Institutions Examination Council banking agency that lacks this authority. In the NCUA’s Office of Inspector General (OIG) Semiannual Report to Congress (April 1-September 30, 2019), NCUA explained how this is potentially a problem due to the risks posed by third-party vendors interconnected with the credit union industry. The OIG is currently auditing this lack of authority in order to determine if the existing examination process adequately addresses the risks imposed by third-party vendors on credit unions. In addition, the OIG is auditing to determine whether examiners adequately assess credit union management’s due diligence over third-party vendors.

Author

John Zasada, JD, CAMS – Compliance Consulting Director, Financial Institutions Group. John can be reached at zasada@doeren.com.