Credit unions navigate a progressively complex economic environment; the National Credit Union Administration (NCUA) has outlined its 2025 Supervisory Priorities to address the most pressing credit union risks. These priorities focus on four critical areas: credit risk, market risk, liquidity risk, and cybersecurity. Rising loan delinquencies, elevated charge-offs, especially in credit card and used vehicle loan portfolios, and ongoing interest rate volatility continue to put pressure on credit union balance sheets and net interest margins. Meanwhile, cyber risks are becoming more frequent and sophisticated, requiring heightened governance.

Proactive risk management is essential for credit unions to remain financially resilient and compliant in this landscape. Examiners will evaluate credit unions’ practices in underwriting, liquidity planning, cybersecurity governance, and member protection efforts closely. Addressing these supervisory priorities isn’t just about regulatory compliance; it’s about safeguarding the institution’s long-term stability and protecting member interests.

This blog examines the NCUA’s 2025 Supervisory Priorities in detail and offers practical guidance on how credit unions can enhance their risk management frameworks to meet examiner expectations and maintain financial stability.

Top Credit Union Risks Under NCUA’s 2025 Lens

The NCUA’s 2025 Supervisory Priorities highlight several credit union risks that pose the greatest challenges to the current economic environment. Understanding these risks and preparing accordingly is essential for credit unions seeking to maintain financial stability and meet regulatory expectations.

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Credit Risks

Credit risk remains a top concern for the NCUA in 2025. After several years of loan growth, credit unions are now seeing a marked increase in loan delinquencies and charge-offs. The deterioration is most notable in credit card portfolios, where delinquency and net charge-off rates have surpassed levels seen during the global financial crisis. Used vehicle loans are also under significant pressure, with both delinquency rates and charge-offs reaching record highs.

Examiners will closely scrutinize lending practices, focusing on the adequacy of loan underwriting standards and whether credit union risks related to loan portfolios are properly managed. This includes reviewing policies for charge-offs and evaluating the adequacy of Allowance for Credit Losses (ACL) reserves. Examiners will also assess how credit unions manage third-party risks when outsourcing lending, servicing, or collections functions.

Market Risks

Interest rate risk remains a critical focus for examiners in 2025. Recent volatility in the rate environment has significantly impacted the earnings and net worth of credit unions. As interest rates rose sharply in 2023 and 2024, many credit unions experienced a faster increase in funding costs than in returns on loans and investments. While interest rates may decline in 2025, this could lead to prepayments on higher-yielding assets, further straining net interest margins.

Examiners will need credit union risk assessment to review how well credit unions manage market risk through their balance sheet strategies. This includes assessing asset-liability management (ALM) frameworks, the impact of interest rate fluctuations on net worth, and the credit union’s ability to manage earnings volatility. Effective management of credit union risks related to interest rates is crucial for maintaining long-term earnings and capital adequacy.

Liquidity Risks

Liquidity risk is another area of heightened concern, as some credit unions may face increased funding pressures due to economic uncertainty and changing member behavior. Examiners will evaluate the sources and sustainability of a credit union’s liquidity, its reliance on wholesale funding, and the adequacy of liquidity reserves.

Credit unions are expected to maintain robust liquidity risk management frameworks that align with their size, complexity, and risk profile. This includes implementing effective policies, stress testing, and contingency funding plans (CFPs) to ensure sufficient liquidity under adverse conditions. Examiners will also assess how liquidity strategies support the credit union’s overall financial stability and risk appetite.

Cybersecurity Risks

Cybersecurity remains one of the noticeable credit union risks in 2024, reflecting the growing threat of cyberattacks on credit unions and their vendors. Ransomware, phishing, and third-party vulnerabilities are among the most pressing concerns. A successful cyberattack can result in financial losses, reputational damage, and member data breaches.

Examiners will review credit unions’ cybersecurity governance, including their information security programs, board engagement, and third-party risk management practices. Compliance with the NCUA’s 72-hour cyber incident notification rule is mandatory, and credit unions are expected to have well-defined incident response plans. The use of tools like the Automated Cybersecurity Evaluation Toolbox (ACET) is encouraged to assess cybersecurity maturity.

How to Mitigate Credit Union Risks

Credit unions can strengthen their risk management frameworks by focusing on the NCUA’s outlined credit union risks. Proactive measures in credit, market, liquidity, and cybersecurity risk management are essential for maintaining regulatory compliance, financial resilience, and member trust.

Credit Risk Management

To address rising delinquencies, credit unions should enhance underwriting criteria and establish early warning systems for at-risk loans. Strengthening collection programs and offering member-focused workout strategies can help minimize charge-offs. Maintaining appropriate Allowance for Credit Losses (ACL) reserves and monitoring third-party vendors involved in lending and collections is also essential.

Market Risk Management

Effective Asset-Liability Management (ALM) practices are key to mitigating market risk. Regular interest rate stress testing enables credit unions to understand the potential impacts on their net interest margins and capital. Managing concentration risk in loan and investment portfolios, as well as closely monitoring prepayment risks, can further stabilize earnings.

Liquidity Risk Management

Credit unions should maintain a diversified funding base and regularly monitor their liquidity ratios. Developing and testing contingency funding plans (CFPs) ensures preparedness for unexpected liquidity events. Liquidity stress testing is also a vital tool for assessing the credit union’s ability to withstand funding pressures in adverse conditions.

Cybersecurity Risk Management

Robust cybersecurity governance starts with oversight and risk assessments. Credit unions should implement comprehensive information security programs, conduct vendor due diligence, and follow incident response protocols to manage credit union risks related to cybersecurity. Compliance with NCUA’s 72-hour cyber incident notification rule and regular penetration testing are key to mitigating evolving cyber risks.

Implement The Right-Sized Risk Management Solution

As credit unions respond to the NCUA’s 2025 Supervisory Priorities, having a streamlined, scalable credit union risk assessment system is critical. Predict360 Essentials offers a right-sized, AI-powered solution tailored specifically for U.S. community banks and credit unions, providing a streamlined solution that simplifies risk and issue management—without adding headcount or outsourcing.

Predict360 Essentials provides standardized, preconfigured tools tailored to credit unions’ needs. Its comprehensive risk libraries, including the Crowe Risk Library, support robust risk assessments covering BSA/AML/OFAC, Fair Lending, UDAAP, Cybersecurity, and more.

With Predict360 Essentials, credit unions can efficiently manage credit, market, liquidity, and cybersecurity risks while meeting regulatory requirements like the NCUA’s 72-hour cyber incident notification rule. It’s a practical, AI-powered solution designed to strengthen resilience and protect members in today’s complex risk landscape.