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CU Snapshot

 Mar '18Feb '18
# of CUs5,5965,757
Members
(millions)
114.9114.4
Total Assets
($ billions)
$1,459.9$1,428.7
Total Savings
($ billions)
$1,228.8$1,199.3
Net Cap.
Assets
10.4%10.5%
Loans to Savings81.5%82.6%
Loan Delinq.0.8%0.9%

         Credit Union Indicators

Learn, Align, Perform, Review, Repeat

GRC—governance, risk management, and compliance—is a constant assessment process.

GRC—governance, risk management, and compliance—is not a one-and-done project. The nonprofit think tank OCEG describes the components of the GRC model as learn, align, perform, and review.

"It's a constant assessment process," says Doug Ferraro, president/CEO of $4.3 billion asset Bellco Credit Union in Greenwood Village, Colo. "Our strategy is to look at areas of risk that benefit our members."

Many boards simply react to problems, says Tony Ferris, CEO of The Rochdale Paragon Group, a CUNA partner. "One board member will experience a hiccup with a service, and then the entire board starts talking about a particular hiccup."

The result is a discussion that can quickly stray from the strategic to micromanagement. GRC can take the bias out of decision making, and it allows the board to challenge management. "Management wants to be challenged, but often boards don't have the right tools to ask the key questions," notes Ferris, who will address the CUNA Governance, Risk Management & Compliance Leadership Institute Oct. 2-4.

As directors understand risk, they take decision making to a higher level. Over the past 10 years, for example, credit unions' acceptance and understanding of asset/liability management (ALM) has evolved.

"Most credit unions have a better handle on ALM than they did in the past," says Scott Daukas, chief risk officer for $1.2 billion asset TwinStar Credit Union in Olympia, Wash.

That's also becoming the case with enterprise risk management (ERM) and GRC.

"They not only take decisions to a higher level, but also learn how to make decisions," Daukas adds.

"GRC is not for the faint-hearted," says Randy Harrington, CEO of Extreme Arts & Sciences. "It requires leadership discipline and a commitment to transparency. But it can prevent errant thinking."

To understand these concepts and how to apply them in decision making, Ferraro suggests seeking outside assistance when adopting ERM and GRC. Top-down buy-in also is important.

"The CEO can't be on the sidelines," he says. "If the CEO isn't fully engaged in the process, it won't work."

(Via Credit Union Magazine)