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NCUA Issues Vendor Management Guidance
Following up on plans it unveiled in January, NCUA has prepared a new questionnaire for examiners to use in their evaluations of credit unions’ third-party relationships and sent it to federally insured credit unions with Letter 08-CU-09.
The questionnaire follows guidance issued last year to credit unions on this topic via Letter 07-CU-13. It addresses the three elements of an effective program for managing such relationships, including risk assessment and planning, effective due diligence and risk measurement, monitoring and control.
Credit unions that participated in NCUA’s January webinar on third-party relationships will be familiar with many of the issues addressed in the questionnaire. The questions, 39 in all (with several parts to some of these), range from such basic matters as whether a credit union keeps a list of its third-party companies to the breadth of its background checks on such firms and what control measures it has in place to ensure the firms’ financial strength, regulatory compliance and performance.
NCUA said examiners will use the questionnaire to document their reviews of credit unions’ third-party relationships, which will be evaluated based on the risk inherent in each.
The agency has also revised its questionnaire on electronic payments systems; the revisions are noted in Letter 08-CU-08.
http://www.ncua.gov/letters/2008/CU/08-CU-09.pdf
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