Page 3 Fynanz Student Loan Policy Bank Secrecy Act Compliance Fynanz manages our compliance with BSA guidelines as agreed within the Network Agreement. The process used to monitor BSA risk is specified in the Loan Program Manual. Management must monitor of BSA to ensure compliance with federal law. Fynanz’s implementation IV. Impact on Enterprise Risk Management Enterprise Risk Management requires that the credit union incorporate the impact of ERM in its policies and procedures. The objective is to understand the various risk factors and recognize the risks undertaken by the organization. The Enterprise Risk Management approach at our credit union comprises a number of risk areas, including: Economic Risk. Economic Risk looks at the external economic environment and the impact those conditions could have on the credit union. Interest Rate Risk. IRR is loosely defined as a mismatch on the balance sheet between assets (primarily loans) and liabilities (shares) of duration and optionality. Liquidity Risk and Pre-Payment Risk. When there is Liquidity Risk, there is low cash flow returning to the CU. Prepayment risk is the risk of the instrument paying off prior to the maturity. Credit & Concentration Risk. Concentration risk can be generally defined as the over-accumulation of a particular asset class in a particular market that has the potential to threaten the Credit Union’s capital. Balance Sheet Structure. This is the impact of the accumulation of assets and their distribution across our lines of business. Compliance Risk. This risk boils down to a potential lawsuit against the Credit Union filed by a member or class of members, or fines and penalties that can be assessed by the NCUA or another federal agency for a failure to comply with laws and regulations. Reputation Risk. This is the current and prospective impact on earnings and capital arising from negative public opinion. These factors, taken individually, apply across a variety of different activities and service offerings provided by the credit union. However, when taken as a whole they encompass the interplay of both external risks (Economic Risk) and internal risks (Balance Sheet Structure). Enterprise Risk Management attempts to clarify the interaction and significance of both internal risks and external risks across the activities of the organization. Enterprise Risk Management activities are not stand-alone systems, but rather are part of other processes, policies and procedures.
Page 3 Fynanz Student Loan Policy Bank Secrecy Act Compliance Fynanz manages our compliance with BSA guidelines as agreed within the Network Agreement. The process used to monitor BSA risk is specified in the Loan Program Manual. Management must monitor Fynanz’s implementation of BSA to ensure compliance with federal law. IV. Impact on Enterprise Risk Management Enterprise Risk Management requires that the credit union incorporate the impact of ERM in its policies and procedures. The objective is to understand the various risk factors and recognize the risks undertaken by the organization. The Enterprise Risk Management approach at our credit union comprises a number of risk areas, including: Economic Risk. Economic Risk looks at the external economic environment and the impact those conditions could have on the credit union. Interest Rate Risk. IRR is loosely defined as a mismatch on the balance sheet between assets (primarily loans) and liabilities (shares) of duration and optionality. Liquidity Risk and Pre-Payment Risk. When there is Liquidity Risk, there is low cash flow returning to the CU. Prepayment risk is the risk of the instrument paying off prior to the maturity. Credit & Concentration Risk. Concentration risk can be generally defined as the over-accumulation of a particular asset class in a particular market that has the potential to threaten the Credit Union’s capital. Balance Sheet Structure. This is the impact of the accumulation of assets and their distribution across our lines of business. Compliance Risk. This risk boils down to a potential lawsuit against the Credit Union filed by a member or class of members, or fines and penalties that can be assessed by the NCUA or another federal agency for a failure to comply with laws and regulations. Reputation Risk. This is the current and prospective impact on earnings and capital arising from negative public opinion. These factors, taken individually, apply across a variety of different activities and service offerings provided by the credit union. However, when taken as a whole they encompass the interplay of both external risks (Economic Risk) and internal risks (Balance Sheet Structure). Enterprise Risk Management attempts to clarify the interaction and significance of both internal risks and external risks across the activities of the organization. Enterprise Risk Management activities are not stand-alone systems, but rather are part of other processes, policies and procedures.
FYNANZ%20MY%20CU%20Student%20Loan%20Policy.docx