ALEXANDRIA, Va.–A focus by one member of the NCUA board on internal fraud is certainly deserved, according to one NAFCU exec.
During last week’s NCUA board meeting Vice Chairman Kyle Hauptman posed questions to members of the agency’s staff over what can be done about inside jobs at credit unions, some of which have come at significant costs to the National Credit Union Share Insurance Fund, including this embezzlement.
NAFCU EVP and General Counsel Carrie Hunt said all one has to do is look to the agency’s material loss reviews to see the persistent threat from insider fraud.
“Of course, the material loss reviews do not cover every fraud situation, because there is a floor for when NCUA has to conduct a review,” said Hunt. “But it does give you an idea for how prevalent fraud is, and it’s not unique to credit unions. Certainly, making sure NCUA is looking at it is important. It’s important to our members, the ones who are doing things the right way. If there is an uptick on fraud it puts more stress on losses to the fund and drags the whole system down.”
Hunt noted the threat has also become more complicated given the remote nature of work during the pandemic, with many people working alone from home.
Potential Forum
During the NCUA board meeting Johnny E. Davis Jr., special advisor to the chairman for cybersecurity and division director, Critical Infrastructure, suggested the agency consider hosting a forum with credit unions similar to the kinds of table-top exercises it already hosts “where we can talk through best practices in implementing an insider threat program.”
Hauptman isn’t the first NCUA board member to raise the issue of internal fraud. Former NCUA Board Member J. Mark McWatters frequently raised questions about insider fraud during his tenure.