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2024 NAFCU - NCRM EXAM STUDY GUIDE WITH CORRECT ANSWERS
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2024 NAFCU - NCRM EXAM STUDY GUIDE WITH CORRECT ANSWERS
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2024 NAFCU - NCRM EXAM STUDYGUIDE WITH CORRECT ANSWERS
What is ERM? - CORRECT ANSWERS- ERM as a comprehensive risk
optimization process that integrates risk management across an organization
What is the NCUA's overall goal when assessing a credit union? - CORRECT
ANSWERS- A key goal of NCUA exams is to protect the share insurance fund
while also determining whether a credit union is in compliance with
applicable laws and regulations
What is ERM (Enterprise Risk Management) role? - CORRECT ANSWERS- -
Provides Reasonable assurance to management and the board
- Identify and manage risk entity wide by closing gaps and removing silos
- Improve resource management
Risk Appetite - CORRECT ANSWERS- The amount of risk a company is willing
to accept to achieve its goals and objectives. To avoid undue risk, risk
appetite must be in alignment with company strategy.
Risk Tolerance - CORRECT ANSWERS- The degree, amount, or volume of risk
that an organization or individual will withstand.
ERM Program Requirements - CORRECT ANSWERS- - Control activities - a set
of P&P to ensure the credit union is effectively responding to risks
- Risk response - management should choose a response (accept, avoid,
share, reduce) and develops a COA for the risk in alignment to risk tolerance
and risk acceptance
- Risk assessment - the CU should continuously analyze risk, considering the
likelihood and impact of various scenarios
- Clear objectives - should have clear strategic, operations, reporting, and
compliance objectives
- Event identification - the CU should continuously identify internal and
external events that may affect objectives
, -Established risk culture - tone comes from the top, sets the standard as to
how CUs should deal with risk
What is Risk Impact? - CORRECT ANSWERS- A measure of the probability
that something will occur and severity of its results
What are the risk decisions? - CORRECT ANSWERS- Accept: continue
activity, appropriate in cases where risk is within acceptable tolerance or
there is no cost effective risk reduction method available
Reduce: Mitigate the likelihood and/or impact
Share: Transfer part of the risk to another party.... i.e., insurance
Avoid: Remove the exposure to the risk all together
What are the NCUA Risk Program Foundations? - CORRECT ANSWERS-
Policies: set the standard and COA
Processes: procedures and practices that govern day 2 day activities
Personnel: staff and managers that perform the process
Controls systems: tools and information system that measure performance
and assesses the current state of the process
What does CAMELS stand for? - CORRECT ANSWERS- Capital adequacy
Asset quality
Management
Earnings
Liquidity
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