Managing risks and compliance topics

Emerging Risks Outlook

Keeping ahead of the complex array of ever-changing risks, compliance issues, and industry regulations that are impacting credit unions requires keen awareness, effective preparation, and loss control scrutiny. When risk management is effective, typically nothing bad happens. But, if you’re blindsided by a problem, your credit union reputation takes the hit. Don’t let not knowing which emerging risks are around the corner take the blame. While each credit union has its own unique risk footprint, this Emerging Risks Outlook introduces risks and trends that should be on your radar.

Impact of large losses

The frequency and severity of some losses have increased significantly in 2024 and many are attributable to account takeovers, check fraud, ITM fraud, ATM jackpotting and ATM smash & grabs. Bad actors are using innovative fraud schemes and deploying age-old tactics with new twists – some getting hit with six- and seven-figure dollar losses. This session will cover these loss specifics and address how many of these losses and their severity can be significantly minimized with proper loss controls.

Navigating litigation trends

Class action lawsuits and litigation can present significant risks to credit union. Credit unions need to exercise caution as it relates to strategy and risk. And keeping ahead of the complex array of ever-changing risks and litigation challenges is critical. This session will cover topics such as:

• Overdraft / NSF fee litigation
• Collection letters (defective post-repossession notices)
• Wage & hours and FLSA
• Foreign transaction fees
• Peer-to-Peer (P2P) fraud & Reg E
• FCRA
• Fair lending

Don’t fall victim: fraud and scams

Fraudsters are constantly evolving their tactics and identifying new, sophisticated ways to steal money and data from employees and members. Using common channels like emails, text, and phone calls; fraudsters typically disguise their identity while retrieving confidential member information. Their multi-channel approach looks for victims who find their stories convincing and will willingly click on links or share sensitive information, which can be used to authorize and transact many types of transactions.

This session covers various forms of check fraud; business email compromise; fraudulent instruction; ransomware; account fraud; consumer scams; elder abuse and more.

Growing your loan portfolio safely

Credit union growth strategies typically include loan growth — consumer, real estate, business lending, indirect, and digital channels. To optimize these lending growth initiatives, you must navigate the lending landscape by understanding the make-up and opportunities of member engagement, benefits of data analytics, and managing risk related to compliance, fraud, and internal lending controls. This session introduces these unique components of risk and compliance while helping you efficiently and safely identify future lending opportunities.

Employment practice risk trends

When credit unions hire employees, as the employer, you have some responsibilities to that employee and to all future employees. However, new laws and responsibilities have made it clear that treating all employees fairly and equitably without creating additional credit union risk is important. This session will examine the risks, rights, and obligations of employers and employees — in addition to highlighting how well-constructed foundational talent components should be in place. It is critical that your HR professionals and managers understand that company culture and reputation play a significant role in worker attrition.

Cybersecurity threats

Cyber threats have grown rapidly driven by the reliance on data, IT systems, fraud, and a number of high-profile cyber incidents. Organizations also face challenges including an increase in third party vendor incidents, rise of artificial intelligence (generative AI), the prospect of litigation, and a shortage of qualified talent to keep you cyber-secure. This session will focus on building an understanding of current and next generation vulnerabilities and provide you with key considerations for strengthening your risk posture across the entire organization.

Key Takeaway: Ransomware's rise in frequency and severity highlights the urgent need for robust IT security and risk management within credit unions. Implementing comprehensive cybersecurity measures and staying informed about evolving threats and insurance requirements are crucial to mitigate risks and avoid potentially devastating ransomware attacks.

Workplace and employee safety

As an employer, you have a responsibility to help keep employees safe on the job and to create a safe workplace for everyone. Workplace and employee safety means so many things. However, like any industry, credit unions are not immune to accidents and incidents that can disrupt operations, harm employees, and impact members/visitors such as:

• Robbery
• Active shooter
• Kidnapping and extortion
• Bomb threats
• Social movement
• Employee, member, and visitor behavior
• Slips, trips & falls

Ensuring the vendor delivers upon expectations (vendor due diligence)

Organizations today are not simply comprised of one internal team. Credit unions, small and large alike, collaborate with partners, vendors, and other third parties. While you can outsource the service; remember, you still own the responsibility of this critical business practice. Managing risks associated with these relationships is a critical aspect to maintaining a successful operation. While vendor risk management can seem like a daunting task; you should establish processes to evaluate and manage associated risks before entering, during, and even after the vendor relationship ends.