Dear Board of Directors and Chief Executive Officers:
The Advisory addresses prudent IRR management practices, especially in light of current financial market and economic conditions. It is consistent with existing NCUA guidance and stresses the importance of effective:
- Corporate governance by your board of directors and senior management;
- Policies and procedures governing all aspects of your IRR management process;
- Risk measuring and monitoring systems commensurate with the size and complexity of your
- Stress testing, including both scenario and sensitivity analysis;
- Risk mitigation strategies; and,
- Internal controls to ensure the integrity of all elements of your IRR management process.
If you have questions concerning the advisory, please contact your Regional Office, state
supervisory authority, or examiner.