Overview
In this episode, we break down the fundamentals of risk management for credit unions — what it really means, why it matters at every asset size, and how boards and executives can build a resilient framework that supports safe, sustainable growth. 

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What We Cover

• The Three Pillars of Risk Management
  • Risk Culture — how tone from the top determines effectiveness.
  • Risk Appetite — defining how much risk is acceptable before strategy becomes unsafe.
  • Risk Management System — the controls, processes, and oversight that put culture and appetite into action. 

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• Why Size Matters — and Doesn’t
  • Practical guidance for smaller credit unions: clear limits, strong oversight, and effective supervisory committees.
  • What larger credit unions need: formal risk appetite statements, risk departments, and comprehensive reporting frameworks. 

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• Common Pitfalls
  • The “capital trap”—why even strong net worth can’t compensate for unmanaged concentration risk (e.g., taxi medallion credit unions).
  • Siloed risk decisions.
  • Hoping limit breaches “self-correct.” 

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• Best Practices for a Strong Framework
  • Align appetite with capital and strategy.
  • Use clear metrics to monitor risk.
  • Establish formal limit-breach processes.
  • Encourage staff to raise risk concerns without hesitation.
  • Maintain strong documentation and communication. 

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Key Takeaway
Risk management isn’t about eliminating risk — it’s about managing it in a way that protects members while enabling growth. A clear culture, aligned risk appetite, and well-designed system create the foundation for long-term success. 

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

Recorded August 30. A short episode looking ahead at the last four months of the year, plus one development worth flagging now.

NCUA sent out a letter on how the exam process is going to work this coming cycle. It went to credit union CEOs. It was not posted on NCUA’s website. Mark has a copy and will cover it in an upcoming episode with Steve Farrar and Todd Miller of the Credit Union Exam Solutions team.

An attorney pointed out that an item on bylaws went out the same way — to CEOs, not listed online. That’s two communications in short order that credit unions received directly and that the public record does not reflect. Mark has thoughts on why NCUA may be handling it that way. He does not agree with it.

Also in this episode: the FDIC and OCC’s new final rule on safety and soundness and whether NCUA needs one of its own; what is likely to land on NCUA’s agenda in the remaining four months; a coming episode on ten things a new chairman should do for clarity and sunshine; the ex-regulator panel of John McKechnie, Geoff Bacino, and Alonzo Swann returning in the fourth quarter, probably after John Crews’s first board meeting; the Inspector General’s report to Congress; and new YouTube shorts that will not appear on the podcast feed.

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

 | WFC Classic: Capital Rules and Risk Management for Credit Unions

John Crews was sworn in as the 14th chairman of the National Credit Union Administration (NCUA), and Mark Treichel recorded this emergency episode within hours of the press release hitting his inbox.

President Donald J. Trump designated Crews as chairman following the Senate’s confirmation of him as a member of the NCUA Board of Directors. In his first public statement, Crews thanked outgoing chairman Kyle Hauptman for his nearly six years of service and for the regulatory reform effort he led — then named the two goals he intends to build on: enabling innovation, and right-sizing the regulatory framework that governs the financial services industry. He also committed to the safety, soundness, and resilience of the credit union system, to maintaining a strong and healthy National Credit Union Share Insurance Fund, and to supporting initiatives that promote access to affordable financial services nationwide. Crews was nominated on May 11 and confirmed by the Senate on August 7; his term expires August 2, 2031.

Mark then turns to what he’s hearing through the grapevine: that NCUA’s senior staff — the agency’s equivalent of the federal Senior Executive Service — have all been called to the Central Office this week. Mark is clear that this is secondhand, but he walks through what those meetings have historically meant, drawing on more than 33 years inside the agency: the 1995 session Chairman Norman D’Amours convened, where Executive Director Karl Hoyle told a room full of supervisors that unfilled vacancies would be advertised externally — a warning that sent Mark to California and set up the path that ended with him as NCUA’s Executive Director; a 1997 planning session as Dennis Dollar joined the board; and the January strategic planning sessions Debbie Matz institutionalized during her 2009–2016 chairmanship, which is where the Office of National Examinations and Supervision (ONES) was created.

The most recent all-hands of this kind was last year’s announced reorganization — the one that never happened, after the union sought to negotiate and Hauptman opted to leave it for his successor. Mark reads Crews’s “right-sizing” language as a signal that the reorg is back on the table, while flagging the complication: a one-member board raises the question of whether a quorum of one is a quorum at all, and a legal challenge on that point could unravel decisions made now. Mark also previews a separate episode on NCUA’s eleven recently approved final rules — of which, by his count, only three say much of anything — and closes on the open question of who becomes Crews’s chief of staff: one of the two political appointees already inside the building, or a name sent over by the White House.

Mark Treichel spent over 33 years at NCUA, including service as Executive Director. Credit Union Exam Solutions is his team of former NCUA executives and examiners who help credit unions prepare for and respond to NCUA examinations.

Summary:
In this special Archive episode of With Flying Colors, Mark explores the meaning and implications of "agreed upon corrective action" in credit union examinations. Drawing from his experience at NCUA, Mark explains how this term appears on examination reports and why its proper implementation is crucial for credit unions.

Key Points Covered:
Mark begins by breaking down the literal meaning of "agreed upon" using dictionary definitions, emphasizing that it means coming to a mutual arrangement or understanding. He shares a recent case where a small credit union reached out about their examination frustrations, highlighting how the agreed-upon process can sometimes break down.

The Process:
The examination report process typically includes a draft phase where credit unions can review and discuss findings with examiners. However, due to year-end pressures and internal goals, sometimes reports are finalized without proper consultation. Mark explains that the examination report's cover page explicitly states it should document "agreed upon corrective actions," making it important for credit unions to ensure they actually have input in this process.

Recommendations for Credit Unions:
Mark advises credit unions to push back when they don't receive proper opportunity for input. He suggests starting with the examiner, then moving up to the supervisory examiner if necessary. While NCUA has final authority on safety and soundness issues, credit unions should still receive the opportunity to influence report language to better serve their needs and their members' interests.

Important Context:
The podcast notes that NCUA implemented a higher level of review for examination reports, requiring supervisory review. While this creates more consistency, it can sometimes make immediate dialogue more challenging, especially when reports are delivered as final without prior discussion.

Closing Thoughts:
Mark emphasizes that credit unions must decide when to "go along to get along" versus when to advocate for changes. The goal should be finding language that satisfies both NCUA's safety and soundness requirements and the credit union's operational needs.

Contact Information:
Listeners can learn more about Mark's services at markteichel.com. The podcast releases new episodes once or twice weekly, providing expert insights on achieving success with NCUA.

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www.marktreichel.com

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Federal credit unions are limited to investing 1% of their assets, in the aggregate, in credit union service organizations. That number went into the Federal Credit Union Act in the 1970s, and when NACUSO went back and researched it, they found no legislative history explaining why 1% was chosen. It is, as NACUSO general counsel Brian Lauer puts it, truly an arbitrary number — and it is now colliding with the capital requirements of artificial intelligence, cryptocurrency, and stablecoin.

In this episode, Mark Treichel is joined by Brian Lauer, general counsel to the National Association of Credit Union Service Organizations (NACUSO) and a partner at Messick Lauer & Smith P.C., for a wide-ranging conversation on where CUSOs stand and where the rules governing them are headed.

Brian explains why NACUSO has shifted from a defensive posture on Capitol Hill — largely a response to NCUA’s push for vendor authority — to an offensive one. Over roughly the last 18 to 24 months the association has been on the Hill four times and returns in September, as its own organization rather than as part of an industry fly-in, pushing for changes to the Federal Credit Union Act that would eliminate the 1% cap and let credit unions manage CUSO investments on a balance-sheet-by-balance-sheet basis, the same way boards already manage capital above the statutory prompt corrective action floor.

The conversation also covers a second statutory issue that gets less attention: the "primarily serves" limitation. As Brian describes it, "primarily serves" is not a limitation on investment powers in the Act, but when NCUA wrote the modern CUSO regulation in the 1990s it conflated investment and lending and applied the standard to both. The practical effect is that a credit union asking for a strategic seat at the table with a technology company has to tell that company half its business must be with credit unions — and the company is usually the one that walks away.

Elsewhere in the episode: why NCUA’s CUSO numbers are unreliable, with the most recent registry list dating from 2024 and no verification of the self-reported data, even as Brian’s own practice forms 30 to 40 CUSOs a year; the consolidation and acquisition activity now visible in the CUSO space, including third-party vendors buying CUSOs that fit their lanes and regional CUSOs merging across geographies; and what a one-member NCUA board does to the regulatory pendulum — faster swings, Brian argues, with less compromise built in.

The episode closes on the GENIUS Act. CUSOs are named in the legislation, which Brian calls a real win, and federal credit unions that want to issue a payment stablecoin will need to do it through a CUSO. He makes the case that credit unions need a stablecoin of their own for the same reason they needed shared branching, that the only way it works is through collaboration among a large group of credit unions — he estimates closer to 1,000 than 100 — and that adoption will likely be slower than the conversation suggests, with the payments side mattering most. Mark adds the argument that moved him from skeptic to something closer to convinced: if stablecoin helps keep the dollar the world’s reserve currency, that is a reason to want it developed here rather than somewhere else.

Brian can be reached through his firm at cusolaw.com and on LinkedIn. NACUSO’s annual conference is in Las Vegas in the spring of 2027, and the association also runs the VentureTech event for credit unions focused on technology.

Concise version — social and discovery

Federal credit unions can invest only 1% of assets in CUSOs. That number went into the Federal Credit Union Act in the 1970s, and there is no legislative history explaining where it came from.

Brian Lauer, general counsel to NACUSO and a partner at Messick Lauer & Smith P.C., joins Mark Treichel to explain why that arbitrary ceiling now matters more than it ever has — and what NACUSO is doing on Capitol Hill about it.

Inside the episode: the 1% cap and the campaign to remove it; the "primarily serves" limitation that keeps credit unions out of strategic fintech investments; why NCUA’s CUSO count cannot be trusted; CUSO consolidation and acquisition activity; what a one-member NCUA board does to the pace of regulatory change; and why any credit union stablecoin under the GENIUS Act will have to be issued through a CUSO — and will only work through collaboration.

The Examiner's Guide and National Supervision Policy Manual (NSPM) govern how NCUA examinations work. In this episode, Mark Treichel, Todd Miller, and Steve Farrar explain what credit unions need to know about both documents.  Key takeaways:  • The NSPM standardized examination procedures after years of regional inconsistency  • The Examiner's Guide is de-emphasized but its reference sections remain useful  • Credit unions should review NSPM chapters on District Management, Programs, and Regulatory Waivers  • Administrative action responses and appeals typically require action within 30 days  • Some Examiner's Guide chapters referenced by the NSPM aren't publicly available  This episode is essential listening for credit unions preparing for examinations or navigating enforcement actions.

For the first time in its history, the National Credit Union Administration (NCUA) has zero board members. Not one. Not two. Zero.

In this emergency episode, Mark Treichel walks through how the agency got here and, more importantly, what it means for credit unions in the meantime.

Kyle Hauptman’s six-year term expired in August 2025. Under the Federal Credit Union Act, a board member may keep serving after a term expires until a successor has qualified — which is why Hauptman was able to serve a full year past his expiration date. On August 7, 2026, the Senate confirmed John Crews. Three days later, Hauptman resigned and took the oath for his new post at the Public Company Accounting Oversight Board (PCAOB). Crews has been confirmed, but he has not been sworn in — and confirmed is not the same as seated.

The finish line is the oath of office, and the oath cannot happen until the commission comes over from the White House with the President’s signature. That paperwork routes through NCUA’s Sensitive Compartmented Information Facility (SCIF), to the general counsel and chief of staff, and then to a swearing-in ceremony in the NCUA boardroom. Until that happens, the seat is unfilled. Mark’s argument: the gap was entirely avoidable. The statute let Hauptman stay. He left anyway.

The agency does not stop, because NCUA’s delegations of authority were built for exactly this kind of situation. Mark treated the delegations as his operating bible during his 33 years at the agency, and he walks through what they cover and what they do not.

What keeps running: examinations and supervision on the normal cycle, findings, Documents of Resolution (DORs), Letters of Understanding and Agreement (LUAs), temporary cease-and-desist orders at the regional director level, charters, and mergers.

What stops: rulemaking. Conservatorships and liquidations, which sit with the board. Asset guarantees. Loss resolutions above the delegated dollar thresholds. Appointments, removals, and promotions of senior personnel. Budget changes beyond a narrow reprogramming authority. And appeals that have reached the board level — the last rung of the appeal ladder is dark until a member is sworn in.

Mark also addresses the argument some are making that a standing continuity delegation lets the executive director step into the board’s shoes. His read: that delegation contemplates a national emergency in which the sitting board members are unable to serve. This is not a national emergency. This is unsigned paperwork — a different thing entirely, and not a basis for staff to exercise authority the Act reserves to the board.

Also covered: the quorum question hanging over the 11 final regulations issued just before the departure; the ongoing Todd Harper and Tanya Otsuka litigation and what a win would mean; the Schedule C shuffle underway in the chairman’s office; and what an incoming single-member chairman faces walking into an agency that has already lost a large share of its most experienced staff.

This is a short-shelf-life episode by design. It may be resolved by the time you hear it. The structural lesson will not be.

Credit Union Exam Solutions is a team of former NCUA executives and examiners who help credit unions prepare for, manage, and appeal examinations. 

www.marktreichel.com

https://www.linkedin.com/in/mark-treichel/

Ryan Donovan, CEO of the Council of Federal Home Loan Banks, joins Mark Treichel to walk through what came out of the first Federal Home Loan Bank oversight hearing in 15 years — and what credit unions should take from it.

The Federal Home Loan Bank System is not a well-known system, as Ryan puts it, so the testimony started with education: 11 banks serving 6,300 members — credit unions, banks, insurance companies, and community development financial institutions (CDFIs) — providing liquidity so those members can serve their own members, customers, and communities.

On credit unions specifically, membership growth continues. A substantial portion of credit union assets is already inside the System; by member count, there is still room to grow among smaller institutions.

Ryan explains the regulatory ask that matters most for liquidity managers: when regulators look at the liquidity coverage ratio and similar measures, Home Loan Bank advances should be treated as core liquidity, reflecting the System’s reliability across its history. Those conversations have begun with the FDIC and will extend to the other member regulators, including the incoming chairman of the National Credit Union Administration (NCUA).

He also draws the distinction credit unions sometimes blur: the Federal Reserve has limited lending authority — overnight lending, with limits on consecutive days and on days borrowed within a set period — while the Home Loan Bank is a daily liquidity provider, with its nexus to housing sitting in the collateral members bring, whether mortgages they originated or bought or mortgage-backed securities they hold.

On interoperability — one of the two hard-to-pronounce words of the hearing, alongside countercyclical — Ryan describes the work that came out of the March 2023 lessons learned: encouraging members to establish and periodically test discount window lines, improving Fed and Home Loan Bank communication so the right people can reach each other at 6:00 on a Friday, negotiating master subordination agreements so collateral can move faster in a crisis, and proposing that the Fed accept a Home Loan Bank letter of credit on behalf of a member in stress to bridge from Friday’s close to Monday’s open. Mark connects this directly to staff turnover, including the roughly 27% of NCUA staff lost to buyouts, and what that does to a call tree.

On housing, the banks are required by law to set aside 10% of the previous year’s net earnings for the Affordable Housing Program (AHP). For the last two years they have contributed 50% more than required, putting more than $1 billion a year toward affordable housing. Ryan is candid about AHP’s burden — 13 FHFA regulations and six advisory bulletins — and notes that FHFA under Director Pulte is overhauling it. He contrasts AHP dollars committed with voluntary program dollars already out the door, and warns against any change to the 10% statutory floor that would crowd out voluntary programs.

The conversation closes on CDFI membership, low income housing tax credit (LIHTC) collateral that is reliable but hard to value, the subsidized programs Chicago, Boston, and Cincinnati run, H.R. 7647 and the community financial institution definition, and why insurance companies belong in the System at all.

In this archive episode of With Flying Colors, host Mark Treichel welcomes Vin Vitton, retired NCUA Senior Credit Specialist and longtime commercial banker, for an insightful discussion on credit culture—what it is, why it matters, and how it shapes a credit union’s lending success.

Vin draws on his unique experience working on all three sides of the desk—as a lender, borrower, and regulator—to explain how a strong credit culture begins with board values, flows through management, and guides every credit decision. Together, Mark and Vin unpack key takeaways including:

• The definition and purpose of credit culture within a credit union.
• How board values and management philosophy shape consistent lending practices.
• The importance of reading regulatory preambles to understand NCUA’s intent.
• Why every policy, system, and training program should reinforce a consistent credit approach.
• How examiners and credit unions can align on “the art” of evaluating risk rather than relying on “paint-by-number” regulation.
• The role of appropriate structuring, documentation, and open dialogue with examiners.

Whether you’re a CEO, board member, or senior lender, this episode provides valuable insight into balancing safe and sound lending with member-focused service.