NCUA releases 2023 supervisory priorities

by Justin White, NAFCU Compliance Blog

While the new year brings with it resolutions and new beginnings, NCUA started its new year establishing its 2023 Supervisory Priorities (Priorities). NCUA introduces these supervisory priorities in the Letter to Credit Unions 23-CU-01, identifying new and existing initiatives the agency will continue in 2023. NCUA discusses several house-keeping issues before diving into its priorities. NCUA highlights it will conduct both examination and supervision activities onsite and offsite. The NCUA Exam Flexibility program and the Small Credit Union Exam Program will continue as well.

Supervisory Priorities for 2023

Interest Rate Risk

NCUA identifies the elevated interest rate environment as one of the key priorities for NCUA. NCUA maintains this environment poses a risk to credit unions as a “…sharp rise in rates has amplified market risk because a credit union’s assets and liabilities do not reprice equally.” This risk may threaten a credit union’s net economic value and projected earnings. NCUA also highlights the addition of the Sensitivity to Market Risk component to the CAMELS rating system. NCUA emphasizes interest rate risk is separate from the liquidity risk a credit union may face.

 

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