REGular Blog: NCUA Releases 2024 Supervisory Priorities

The NCUA has released its Supervisory Priorities list for 2024. Every year, this list provides some insight into what areas the agency is paying close attention to in their examinations, rulemakings, and other actions. Seeing what items move up to the top, down to the bottom, or come off the list entirely gives us some idea of the NCUA's priorities for the coming year.

They list a number of supervisory priorities, followed by "other updates," which some consider secondary priorities. Generally, the priorities listed at the top of the list are of the highest importance. The table below shows the 2024 Supervisory Priorities and Other Updates, and how it compares to 2023.

What moved up or down the list for 2024?

Interest Rate Risk: While still on the priorities list, interest rate risk has moved from the top spot in 2023 down to 5th in 2024. This comes as no surprise when you consider the interest rate environment we are in today versus in January of 2023.

Credit Risk: Credit risk leapfrogged liquidity risk on the 2024 list. As market data continues to show a rise in auto loan delinquency and credit card balances, fears of the financial impact of missed payments are no doubt top of mind for NCUA.

Consumer Financial Protection: CFP rose from the last priority in 2023 to the third in 2024, even ahead of cybersecurity. Consumer Financial Protection has long been a top priority for NCUA Chairman Todd Harper, and the shift in party control of the NCUA Board has many believing we will see a strong emphasis on CFP.

What dropped off the list for 2024?

The 2024 list is shorter than 2023, with one fewer priority and two fewer other updates. Here's what didn't make the cut for 2024:

• Fraud Prevention and Detection
• CECL Implementation
• Succession Planning
• Post-Examination Survey

The biggest surprise there is fraud prevention and detection, given that fraud continues to increase, and with new AI tools available to fraudsters, most expect that trend to continue.

(On a personal note related to fraud - just last week my parents received a phone call from a fraudster using an AI generated voice purporting to be my brother. AI-Brother said he had been in a car accident, that he had hit a police car who had driven through a red light, that he had failed a breathalyzer because he had taken some cough syrup, and he now needed our parents to wire $22,000 to a bail bondsman. Not only are the fraudsters getting creative, they are getting specific!)

Additionally, while the post-examination survey was removed from this year's list, the NCUA did discuss exams in the opening of the letter. They note that they will continue to conduct some exam activities offsite, and that they will continue their Small Credit Union Exam Program for FCUs with $50 million or less in total assets.

What's new to the list in 2024?

Bank Secrecy Act Compliance is back! After being a mainstay on the list from 2015 through 2022, NCUA surprised us in 2023 by not including BSA in its Supervisory Priorities. It has returned in 2024 as the top item in Other Updates. This is likely due to the Beneficial Ownership Information Reporting Rule and other rulemakings coming out of the Anti-Money Laundering Act of 2020 that will be coming into place in the coming years.

You can find the full 2024 Supervisory Priorities