Federally Insured Credit Unions and Disaster Recovery
For Immediate Release: April 21, 2020
FAIRFAX, Va. – April 21, 2020: Disaster Recovery
The goal of disaster preparedness is to lessen the impact of disasters on Credit Union members, staff and operations in the event of an actual disaster. These disruptions can range from a power outage to a natural disaster physically destroying a credit union’s premises.
This is from CUNA: All federally insured credit unions are required to have disaster recovery and business resumption plans to address all types of disruptions.
Per NCUA, a disaster preparedness program should:
- Be commensurate with the institution’s complexity of operations;
- Minimize interruptions of service to members and maintain member confidence in times of emergency; and
- Be reviewed at least annually, and address changes in the credit union’s operations.
NCUA’s Catastrophic Act Preparedness Guidelines (NCUA’s Part 749, Appendix B) provides recommendations for developing and maintaining a disaster recovery program with the oversight and approval of the board of directors.
The program should include:
- A business impact analysis to evaluate potential threats. After evaluating exposure to a full range of possible disasters, the cost, duration and impact of critical service/system disruptions should be considered;
- A risk assessment to determine critical systems and necessary resources. Credit unions should prioritize the risks to critical systems/services and develop contingency plans accordingly;
- A written plan addressing:
- Individuals with authority to enact the plan;
- Preservation and ability to restore vital records;
- A method for restoring of services through identification of alternate operating location(s) or mediums to provide services;
- Communication methods for employees and members;
- Notification of regulators;
- Training and documentation of training; and
- Testing procedures, including a means for documenting the testing results.
- Internal controls for reviewing the plan at least annually and for revising the plan; and
- Annual testing to determine if the credit union could recover to an acceptable level of business within the time-frame stated in the disaster recovery plan.
NCUA Examiners will consider the following elements when reviewing Credit Unions PREPARE:
- Planning – Ensuring Financial Services to Members
- Resources – Allocation of Sufficient Equipment and Facilities
- Evaluation – Testing of Contingencies for All Critical Systems
- People – Maintaining Readiness of Staff and Officials
- Alliances – Established Relationships with Other Organizations
- Review – Updating Internal Plans for Effectiveness
- Experience – Incorporate Lessons Learned
Other things to consider:
- Members may leave if they don’t have access to critical credit union services
- Crucial data can be lost in an event
- Possible loss of employees or critical personnel
About FedComp: For more than 35 years FedComp has serviced its credit union clients’ core data processing needs, both technically and with live 24/7 customer support. FedComp is a leading Microsoft-based core processing system, evolving from DOS in 1982 to Windows 10 today. Since 1984, more than 3,500 credit unions have employed its core data system. Today $3.8 billion in assets are managed by FedComp with credit unions in the continental U.S., Caribbean and the United Kingdom. www.fedcomp.com