What should credit unions monitor to detect potential changes in a member's risk profile?

Monitoring indicators such as changes in employment or account activity is crucial for credit unions to effectively detect potential changes in a member's risk profile. Employment status directly impacts a member’s financial situation, which can influence their ability to meet obligations. Additionally, fluctuations in account activity may suggest alterations in spending behavior, financial distress, or other important changes in a member's circumstances that could affect their risk level.

By keeping a watchful eye on these indicators, credit unions are better equipped to identify any shifts in risk, which allows for timely interventions or reassessments of member profiles. This proactive approach is fundamental for compliance with regulations aimed at preventing fraud and ensuring financial stability within the membership base.

Monitoring only major account transactions would be insufficient because it would overlook the subtleties of an individual member's overall financial picture, while changes in government regulations and internal policy changes might not have a direct impact on individual members' behaviors and circumstances.