In preparation for the annual meeting between NAFCU's Board of Directors and the Board of Governors ofthe Federal Reserve System (Fed), we would like to request your input on various issues and learn aboutyour experiences with Fed services. Your responses to these questions are very important to both the Fedand NAFCU, and your help is greatly appreciated. The survey results will be summarized in the 2019NAFCU Report on Credit Unions with a copy provided to you later this year.

Please complete the survey by August 30, 2019. All responses will be kept confidential.

Your Information

NAFCU 2019 Federal Reserve Survey

1. Your Name*

2. Credit Union Name*

3. Charter Number

4. Email Address or Phone Number

Part I of V: Strategic Challenges

NAFCU 2019 Federal Reserve Survey

Slight / none Moderate Significant

Maintaining or increasing capital

Maintaining or improving credit quality

Maintaining or attracting retail deposits

Strengthening net interest margin

Maintaining or increasing non-interest income

Achieving satisfactory mortgage loan volume

Achieving satisfactory business loan volume

Achieving satisfactory consumer loan volume

Meeting regulatory compliance requirements

Maintaining a secure electronic environment

Maintaining access to affordable payments

Expanding your investment in technology

Attracting and retaining skilled staff and management

Managing third party vendors

Slow economic growth within your field of membership

Population loss within your field of membership

Aging member base

Weak housing markets

Decline in a key select employee group (SEG) orcommunity’s primary industry

Lack of growth opportunities

5. Rate the magnitude of the challenges you anticipate over the next three years.

Little to no pressure Moderate pressure Significant pressure

National banks

Community banks

Other credit unions

Fintech firms (e.g.,marketplace andonline lenders, mobilepayment providers,etc.)

6. How much competitive pressure do each of the following place on your credit union?

Significantlydecreased

Moderatelydecreased No change

Moderatelyincreased

Significantlyincreased

National banks

Community banks

Other credit unions

Fintech firms

7. How has the degree of competitive pressure from each of those sectors evolved in recent years?

Little to no concern Moderate concern Significant concern

Credit risk

Interest rate risk

Liquidity risk

Regulatory/ compliance risk

IT/ cyber risk

Operational risk

Fraud risk

Strategic risk (e.g., new business initiatives,succession planning, etc.)

Vendor management risk

8. Indicate expected levels of risk management concerns for the following items over the next threeyears.

9. Which of the following area(s) do you expect to drive spending increases the most over the nextthree years? (please select all that apply)

Information technology

Regulation/ control environment

New products or services

Changes to charter type or field of membership

Acquisitions

Expanding facilities

Advertising and marketing/ branding

Employee compensation/ training

10. Which of the following IT-related projects do you envision your credit union investing in overthe next three years? (please select all that apply)

Core conversion/ upgrade

Servicing/ collection

Mobile banking

Online banking platform

Payments processing

Fraud prevention

Data analytics/ marketing

Automation of compliance or regulatory reporting functions

Customer kiosks/ self-service stations

ATMs

Other (please specify below)

Small vendor Regional vendor

National vendor/core provider/large fintech CUSO In-house

Core conversion/upgrade

Servicing/ collection

Mobile banking

Online bankingplatform

Payments processing

Fraud prevention

Data analytics/marketing

Automation ofcompliance orregulatory reportingfunctions

Customer kiosks/ self-service stations

ATMs

Other (as specified inprevious question)

11. For those projects that you plan to invest in, please identify the most likely technologyprovider(s) or partner(s), if known. (please select all that apply)

12. Roughly what percent of your 2019 operating budget is devoted to cybersecurity?

13. Five years ago, roughly what percent of your operating budget was devoted to cybersecurity?

14. Which of the following issues do you consider critical to your credit union’s continued growthand success? (please select all that apply)

Field of membership

A healthy, appropriate regulatory environment

Capital requirements which are properly aligned with industry risks

Access to secondary mortgage market

A financial marketplace with appropriate safeguards against fraud and data breaches

15. Given the current environment, what is the minimum asset level a credit union needs tosurvive?

$50 million

$100 million

$250 million

$500 million

$1 billion

Other (please specify below)

16. What is the likelihood that your credit union will be involved in a merger in the next three years?

Very likely as a merger

Somewhat likely as a merger

Unlikely

Somewhat likely as a mergee

Very likely as a mergee

Part II of V: Liquidity and Lending

NAFCU 2019 Federal Reserve Survey

Increased available

lines of credit in past 12months

Accessed lines of creditin past 12 months

Tested access inbackup liquidity plan in

past 12 months

Intend to gain access tofunds in next 12

months

Banks

FRB Discount Window

FHLB

Corporate CUs

NCUA CentralLiquidity Facility

Other

For "Other", please specify here

17. With regard to your backup liquidity plan, which of the following options do/did you use?(please select all that apply)

18. How important is a Federal Home Loan Bank (FHLB) to your credit union's daily liquidity needs?

Not an FHLB member

Little to no importance

Somewhat important

Very important

Tightened

considerablyTightenedsomewhat

About thesame

Loosenedsomewhat

Loosenedconsiderably Do not offer

Credit card

Auto loans

First mortgage residential: GSE-eligible

First mortgage residential: All non-GSE

Other residential

Business/ commercial

19. Please indicate how your loan standards have changed in the following categories over the past12 months:

Decreased

substantiallyDecreasedsomewhat

About thesame

Increasedsomewhat

Increasedsubstantially Do not offer

Credit card

Auto loans

First mortgage residential: GSE-eligible

First mortgage residential: All non-GSE

Other residential

Business/ commercial

20. In the past 12 months, how has loan demand changed for the following categories?

21. What are the key factors influencing how heavily you utilize Fannie Mae and Freddie Mac (theGSEs)?

Do not use

Ease of access relative to alternatives

Pricing

Other (please specify below)

22. Other than the GSEs, what options does your credit union use to sell mortgage loans? (pleaseselect all that apply)

None

Mortgage wholesaler

Private placement

CUSO

FHLB

Other (please specify below)

23. What percentage of your first mortgage loans outstanding qualified to be sold to the GSEs as ofJune 2019?

24. Approximately what portion of your residential mortgage originations from the past 12months did you sell to the secondary market?

25. Do you plan to sell a larger or smaller portion over the next 12 months?

Larger

Smaller

About the same

26. Would your mortgage loan originations decrease if FHFA were to raise g-fees?

Yes

No

Not sure

Part III of V: Fee Income

NAFCU 2019 Federal Reserve Survey

Overdraft

NSF

27. How much do you charge for:

28. How often do your members express confusion or dissatisfaction with the required opt-inprocess for overdraft protection?

Never

Rarely

Occasionally

Frequently

29. What percentage of your members have opted in to overdraft protection?

30. Of those who have opted in, roughly what percent used the service during the past 12 months?

31. In general, which of the following best describes the order in which your credit union processestransactions?

As presented

Chronologically

By value, smallest first

By value, largest first

Other (please specify below)

32. The Durbin amendment capping debit interchange rates for issuers larger than $10 billion wentinto effect in October 2011. How would you estimate your credit union’s per-transaction debitinterchange rate changed in that time, after adjusting for any changes in average transactionamount?

Increased

Decreased

About the same

Part IV of V: Regulatory and Legislative Issues

NAFCU 2019 Federal Reserve Survey

Total compliance/ risk management activities

Deposit account compliance

HMDA/ Fair Lending

Unfair, Deceptive, or Abusive Acts and Practices(UDAAP)

Non-mortgage consumer lending regulations

Mortgage regulation compliance

Bank Secrecy Act/ anti-money laundering

IT compliance

Capital rules

33. Please indicate the approximate number of full-time equivalent (FTE) staff members devoted tothe following compliance activities in 2010 (the year of the Dodd-Frank Act).

Total compliance/ risk management activities

Deposit account compliance

HMDA/ Fair Lending

Unfair, Deceptive, or Abusive Acts and Practices(UDAAP)

Non-mortgage consumer lending regulations

Mortgage regulation compliance

Bank Secrecy Act/ anti-money laundering

IT compliance

Capital rules

34. Please indicate the approximate number of full-time equivalent (FTE) staff members devoted tothe following compliance activities currently.

35. Identify the areas in which you expect to increase the number of full-time equivalent (FTE) staffmembers devoted to the following compliance activities in the next three years. (please select allthat apply)

Total compliance/ risk management activities

Deposit account compliance

HMDA/ Fair Lending

Unfair, Deceptive, or Abusive Acts and Practices (UDAAP)

Non-mortgage consumer lending regulations

Mortgage regulation compliance

Bank Secrecy Act/ anti-money laundering

IT compliance

Capital rules

36. Please estimate the approximate dollar amount devoted to compliance activities in 2010 (theyear of the Dodd-Frank Act).

37. Please estimate the approximate dollar amount devoted to compliance activities during themost recent 12 months.

38. Do Regulation D transaction limits generate confusion and questions among your members?

Yes

No

Not sure

39. Do you believe it is necessary to limit the number of monthly transfers on accounts that fallunder Regulation D?

Yes

No

Not sure

40. Does your credit union treat all accounts as transaction accounts for reserving purposes?

Yes

No

Not sure

Yes No Not sure

Number of check fraud attempts

Avg. dollar amount of fraud attempts

41. Has your credit union seen an increase in the number and/or dollar amount of check fraudattempts in recent years?

42. Has your credit union already made business changes (product offerings, balance sheetcomposition, the amount of capital held, etc.) related to risk-based capital requirements or thecurrent expected credit loss (CECL) accounting standard, or do you anticipate doing so in the nearfuture?

Yes

No

Not sure

43. How would you rate the projected combined impact of risk-based capital (RBC) and CECL onyour credit union's ability to serve its members?

No impact

Minimal

Moderate

Significant

Stronglydisagree

Somewhatdisagree Neutral

Somewhatagree

StronglyAgree

The NCUA is appropriately focused on the prudentialconcerns of the credit union system.

The NCUA is responsive to evolving areas of risk within thecredit union system.

44. Based on your credit union’s experience, please indicate the degree to which you agree with thefollowing statements regarding the NCUA’s current regulatory approach.

45. In what areas should the NCUA improve its general examination approach? (please select allthat apply)

IT and data security

BSA/AML compliance

Consumer compliance

Safety and soundness

Other (please specify below)

46. What examination reforms would be most desirable for your credit union? (please select all thatapply)

Improved examiner subject matter expertise

Shortened exam length

Longer exam cycle

Greater utilization of off-site examination

Creation of independent appeals process

Greater advance notification of exam focus areas

Security enhancements to file transfer system

Technology improvements

Other (please specify below)

47. NCUA intends to issue a proposal related to subordinated debt by the end of 2019 to providecredit unions greater capital flexibility. How likely would it be that your credit union would issuesubordinated debt, if permitted to do so?

Very likely

Somewhat likely

Not sure

Somewhat unlikely

Very unlikely

48. What features would be important to you in any subordinated debt proposal?

49. In your most recent NCUA examination, did the examiner apply the Automated CybersecurityExamination Tool (ACET)?

Yes

No

50. If so, what was the highest cybersecurity maturity level achieved across all domains?

Baseline

Evolving

Intermediate

Advanced

Innovative

N/A - we have not been examined with ACET

Not concerning Somewhat concerning Very concerning

GDPR Compliance

California ConsumerPrivacy Act

Compliance with otherstate privacy laws

Potential for NCUA toacquire 3rd partyvendor authority

51. Please indicate your level of concern for the following legal and regulatory issues:

No concern Minimal concern Somewhat concerned Very concerned

Merchant

Payment processor

Third-party vendor

Core service provider

Criminal actor

Insider threat

Non-bank fintechcompany (excludingvendors)

52. Please indicate the level of concern you have for each of the following sources of cybersecurityrisk:

53. Does your credit union currently maintain a diversity or inclusion plan to guide lendingactivities? Such a policy might include a significant unmet needs plan or a section voluntarilyincluded within a general business plan.

Yes

No

Not diverse Somewhat diverse Very diverse

Membershipcomposition

Staff composition

Board composition

54. In terms of race, color, religion/ creed, national origin/ ancestry, sex, age, physical or mentaldisability, and veteran status, how would you describe the level of diversity within your creditunion?

If so, please describe.

55. Does your credit union engage, or plan to engage, in diversity outreach?

Yes

No

56. Is your credit union currently pursuing any of the following changes to your field ofmembership (FOM) or charter? (please select all that apply)

Expansion of FOM

Addition of underserved area

Low income designation

Conversion to state/ federal charter

57. What FOM constraints have imposed the greatest obstacles to growth? (please select all thatapply)

Inability to add underserved area

Small or stagnating SEG groups

Inability to expand into new communities

Slow approval process for FOM amendments

Aging membership

Other (please specify below)

58. In the last 12 months have you turned down a loan application on a non-owner occupied homedue to the 15-year maturity limit?

Yes

No

Not sure

Part V of V: Use of Federal Reserve Services

NAFCU 2019 Federal Reserve Survey

None Some Most All

Corporate CUs

Banks

Federal Reserve

Outside Vendors

59. To what extent does your credit union use the following intermediaries for transaction services?

Very poor

Belowaverage Average

Aboveaverage Excellent Do not use

Coin and Currency Services

Accounting Services

Check 21 Enabled Services

FedImage Services

Paper Check Clearing

FedPayments Reporter Service

FedReceipt Services

Foreign and Canadian CheckServices

FedACH Origination and Receipt

FedGlobal ACH Payments

FedACH SameDay Service

FedComplete Packages

FedTransaction Analyzer Service

National Settlement Service

FedWire Funds Service

FedWire Securities Service

FedLine Direct

FedLine Command

FedLine Advantage

FedLine Web

Fed Discount Window

Educational Services

60. Please rate your experience using the following Fed Services over the past 12 months:

61. Overall, how do you feel the Federal Reserve prices its services?

Very competitive

Competitive

Somewhat competitive

Not competitive

Most competitively priced service

Least competitively priced service

62. Among the services that you use, which do you consider the most and least competitivelypriced?

63. The recently announced FedNow Service will allow depository institutions to settle transactionsin real-time, on a 24x7x365 basis through the Federal Reserve Banks. Although still in development,how will FedNow affect your plans, if any, for faster payment adoption?

Accelerate adoption

Delay adoption

No change

64. FedNow will have an initial transaction limit of $25,000 for real time payments? How would youcharacterize this threshold?

Should be higher

Should be lower

Appropriately balanced