NCUA Issues Advisory on Liquidity Risk

The NCUA advisory issued Wednesday noted that while the credit union industry remains stable, the agency “continues to see growing liquidity stresses within the system.” 

The agency stated that credit unions “experiencing lower share growth, high loan growth, and declining levels of available liquidity as a result” need to focus on liquidity management. It called for credit unions to focus on managing and forecasting cash flow, structuring liabilities, controlling asset composition, developing governance and monitoring structures, and maintaining diversified sources of liquidity. 

The NCUA added it will continue verifying that credit unions are carrying out “liquidity and asset-liability management planning to address current challenges and future uncertainties.” The agency also highlighted its webpage for liquidity risk resources.