In a National Credit Union Association examination, a certain type of investment on a credit union’s books is likely to trigger extra attention from the examiner. In this post, I’ll describe what raises that red flag, and what you can do to prepare for—or even avoid—an “expanded scope” NCUA exam.

According to the online NCUA Examiner’s Guide, examiners should document the expected scope of an exam before the on-site portion of the exam. This includes identifying any areas that require an expanded scope.

The most common trigger for an expanded scope of your employee/executive benefits program is when you have investments that:

• are not allowable under the Code of Federal Regulations, Part 703, (and Part 704 where applicable) except when used for funding employee/executive benefits or for charitable donation accounts; and

 

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