Security Program for Credit Unions: Physical Security (Robbery, Burglary, and Larceny)

Last Reviewed: May, 2018

Credit unions are subject to threats to the physical security of their employees, members, and member assets and information. Part 748 of NCUA Regulations require each federally-insured credit union to establish a written security program that:

  1. Protects each credit union office from robberies, burglaries, larcenies, and embezzlement;
  2. Ensures the security and confidentiality of member records, protect against the anticipated threats or hazards to the security or integrity of such records, and protect against unauthorized access to or use of such records that could result in substantial harm or serious inconvenience to a member;
  3. Responds to incidents of unauthorized access to or use of member information that could result in substantial harm or serious inconvenience to a member;
  4. Assists in the identification of persons who commit or attempt such actions and crimes, and
  5. Prevents destruction of vital records.

How does robbery affect credit unions?
Robbery is a real and increasing threat for credit unions. It has a potential for high loss and carries with it the possibility of personal injury. Armed robbery is an inherent risk in the credit union industry. Employees and members are a credit union’s most valuable assets. Neither should have their lives put in jeopardy as a result of poor planning and inadequate security procedures.

What does the credit union need to do?
It is management’s responsibility to develop adequate security programs and procedures to protect the employees and the assets of the credit union. The security policy should address these programs and establish procedures to deal with the risk as well as methods to train their employees to handle and deal with the potential threat. The policy should contain address the following areas:

How does burglary affect credit unions?
Burglary, while it usually does not carry the same risk of personal injury associated with robbery, still poses a risk of high loss as well as a potential for damage to credit union facilities, property, and records.

What does the credit union need to do?
The credit unions security program should address procedures to limit the credit unions loss and damage in the event of a burglary. Some areas that should be addressed include:

How does larceny affect credit unions?
Larceny, fraud, and more specifically, embezzlement are the most common threats to credit unions. The FBI estimates that 100 percent of all credit unions are currently experiencing or will experience some type of fraud or embezzlement. This threat ranges from employees pilfering office supplies or over claiming expenses to complicated cases of individuals (employees, members or other individual) diverting large amounts of credit union funds and assets. It also includes attempts by members and others to defraud the credit union. This includes a myriad of schemes and plots, including: forgeries, kiting operations, falsifying applications, overvaluing collateral, and wire transfer or other electronic scams.

What does the credit union need to do?
The credit union should establish and maintain an employee code of ethics. It should clearly set forth standards and expected behavior. Management should foster a moral and ethical atmosphere. Honesty breeds honesty, and the converse is also true. Acts of larceny, fraud, or embezzlement should be handled quickly, firmly, fairly, and consistently. The credit union’s security program should address as many risk areas as are appropriate. The credit union should also consider the following when developing its policy: