Is there an adequate degree of integration between balance sheet risk management and strategic planning?
According to Fulwood, examiners will look at where the credit union has said it is going and how the ALCO is involved in its forward motion. If a credit union says, “We’re going to quadruple our real estate portfolio,” then the strategic plan should show senior management’s rationale for the strategy, and include comments from relevant players, such as a VP/lending in this example. “We want to do this stuff, but we have to know what we look like (financially) when we do,” Fulwood says. “If I need to get out, how do I get out? Show an analysis of every decision. How are you going to make your goals happen from an ALM standpoint?” Are the CU’s controls over liquidity adequate? Regulators want to know if you have enough money on hand, Fulwood said. “Liquidity is often overlooked because it’s really not important until you don’t have it,” he noted. “You want to have some kind of forward-thinking cash-flow analysis so you know what you have coming due. Maybe you have some CDs you’re not goi
