Overall Risk & Compliance Assessment
Your credit union demonstrates satisfactory overall risk management with a composite CAMEL rating of 2. The institution maintains strong regulatory compliance across key areas, with BSA/AML compliance at 96.5% and net worth ratio at 10.2%, well above the regulatory minimum of 7% for well-capitalized institutions.
Key Strengths
- Capital Position: Net worth ratio of 10.2% provides substantial buffer above well-capitalized threshold (7%)
- BSA/AML Compliance: Maintaining 96.5% compliance rate with robust transaction monitoring systems
- Asset Quality: Delinquency rate of 0.87% significantly below industry average of 1.2%
- Management Excellence: CAMEL management rating of 1 reflects strong governance and controls
Critical Alerts Requiring Immediate Attention
🚨 High Priority: BSA/AML Transaction Pattern Alert
Issue: Unusual transaction pattern detected in 3 business accounts involving wire transfers totaling $487,000 over 5 days. Pattern deviates significantly from historical behavior for these accounts.
Recommended Action: Immediate review required for potential Suspicious Activity Report (SAR) filing. Enhanced due diligence should be conducted on all three accounts. Estimated completion: 48 hours.
Regulatory Impact: Failure to file required SARs within 30 days could result in regulatory citations and penalties.
⏰ High Priority: Call Report Filing Deadline
Issue: Quarterly Call Report 5300 filing due in 5 days (January 20, 2026).
Recommended Action: Ensure all financial data reconciliation is complete and reviewed by senior management. Schedule final review meeting within 48 hours.
Regulatory Impact: Late filing results in automatic regulatory scrutiny and potential enforcement actions.
Risk Categories Analysis
Credit Risk
Overall credit risk remains manageable with total portfolio delinquency of 0.87%. However, month-over-month delinquency increased 15%, primarily driven by personal loans (1.23% delinquency) and credit cards (2.45% delinquency).
- Auto loans: 0.42% delinquency (excellent performance)
- Mortgages: 0.68% delinquency (stable)
- Personal loans: 1.23% delinquency (requires monitoring)
- Credit cards: 2.45% delinquency (elevated, industry typical)
- Business loans: 0.91% delinquency (satisfactory)
Concentration Risk
Commercial loan portfolio represents 25.3% of total assets, slightly exceeding the recommended 25% threshold. While current performance is satisfactory (0.91% delinquency), this concentration warrants enhanced monitoring.
Recommendation: Implement quarterly stress testing for commercial loan portfolio and consider gradual diversification through increased consumer lending initiatives.
Operational Risk
Operational risk controls are functioning effectively. Recent increase in failed login attempts from specific IP ranges was identified and resolved, demonstrating strong cybersecurity monitoring capabilities.
Compliance Risk
Compliance framework is robust with 96.5% BSA/AML compliance and satisfactory CRA rating. Regular training programs and automated monitoring systems are effectively identifying potential issues before they escalate.
NCUA CAMEL Component Ratings
Your credit union's composite CAMEL rating of 2 (Satisfactory) reflects sound risk management practices with two components earning the highest rating of 1 (Strong).
- Capital Adequacy (2): Well capitalized with 10.2% net worth ratio, providing adequate buffer for asset growth and potential losses
- Asset Quality (2): Satisfactory asset quality with manageable delinquency levels and appropriate loan loss reserves
- Management (1): Strong management team demonstrating effective strategic planning, risk management, and internal controls
- Earnings (2): Satisfactory earnings performance with stable net interest margin and controlled operating expenses
- Liquidity (1): Strong liquidity position with loan-to-share ratio of 78.3% and adequate access to funding sources
- Sensitivity to Market Risk (2): Satisfactory interest rate risk management with appropriate asset-liability management practices
Management and Liquidity are particular institutional strengths, both earning ratings of 1 (Strong). This reflects excellent governance practices and prudent balance sheet management.
Fraud Detection & Prevention
Fraud prevention systems are performing above industry standards with a 74% fraud prevention rate. Last month, systems successfully prevented approximately $52,000 in fraudulent transactions while detecting 7 fraud cases totaling $18,500 in losses.
Fraud Trends:
- Primary fraud vector: Card-not-present (CNP) transactions
- Average fraud case value: $2,643
- Prevention rate: 74% (industry average: 68%)
- Time to detection: Average 2.3 days
Recommendations:
- Enhance real-time monitoring for CNP transactions over $500
- Implement additional authentication for high-risk merchant categories
- Expand member education program on social engineering scams
Strategic Recommendations
Immediate Actions (0-30 days)
- Address BSA/AML alert regarding unusual business account activity - conduct enhanced due diligence and determine SAR filing requirement
- Complete and file quarterly Call Report by January 20, 2026 deadline
- Review and update concentration risk policies given commercial loan portfolio at 25.3%
Short-term Actions (30-90 days)
- Conduct stress testing on commercial loan portfolio given concentration levels
- Implement enhanced monitoring protocols for personal loans due to 15% MoM delinquency increase
- Review and update fraud prevention rules for CNP transactions
- Develop diversification strategy to reduce commercial loan concentration
Medium-term Strategic Initiatives (90-180 days)
- Enhance BSA/AML automation to improve from 96.5% to 98%+ compliance
- Implement predictive analytics for early delinquency identification
- Develop comprehensive enterprise risk management dashboard for board reporting
- Review and optimize capital deployment strategies to maintain strong ratios while maximizing member value
Conclusion
Your credit union maintains a sound risk profile with strong capital position, effective compliance programs, and quality asset portfolio. The composite CAMEL rating of 2 (Satisfactory) reflects well-managed operations with particular strengths in management and liquidity.
Immediate attention should be directed to the high-priority BSA/AML alert and upcoming regulatory filing deadline. The slight elevation in commercial loan concentration and recent uptick in personal loan delinquencies warrant enhanced monitoring but do not pose immediate concerns given strong overall asset quality.
Continued focus on proactive risk identification, robust compliance processes, and strategic capital management will position the institution for sustained regulatory performance and member service excellence.