ALEXANDRIA, VA.–What would you do to stop insider fraud at credit unions if you were at NCUA or state regulator?
As CUToday.info has reported and continues to report, long-running internal fraud continues to be a significant problem within credit unions, the most recent example being the alleged $40-million fraud at the $21-million C B S Employees FCU in Studio City., Calif., as reported here and here.
The alleged fraud at C B S Employees is only the latest in a number of long-running frauds in which insiders have stolen anywhere from tens of thousands to tens of millions of dollars. Ultimately, it’s the National Credit Union Share Insurance Fund that takes the hit, as do bond coverage rates and costs.
While the problem is well-documented and reported, the resolution isn’t. Have some suggestions on how NCUA and state regulators might do a more effective job of uncovering such fraud? Suggestions for more effective oversight? Or is the problem simply not resolvable and there will always be a risk?
CUToday.info is compiling ideas and strategies, and we welcome your input. Send your feedback to Frank J. Diekmann at Frank@CUToday.info. CUToday.info will honor requests for anonymity once a source is confirmed.