ALEXANDRIA, Va.--The growing cases of small CU fraud were on the mind of Board Member Mark McWatters at Thursday’s open board meeting. McWatters suggested that the agency step up its focus in investigating such fraud.
Following the quarterly NCUSIF report, McWatters noted that of the $30 million in losses to the insurance fund this year, $28.6 million is due to fraud.
“A substantial amount of the losses are from garden-variety CUs. Should we not learn from this?” said McWatters, suggesting the agency spend a little less time on regulation and a little more on fraud.
Board Chairman Debbie Matz quickly countered, saying she took “exception” to McWatter’s point.
“In order to minimize credit union failures credit union regulation is very important. Regulation is a key part of safety and soundness—so safety and soundness and sound regulation go hand-in-hand. I want that on the record.”