A Practical Cybersecurity Framework for Small and Community Credit Unions 

Cybersecurity guidance is abundant, but clarity is often lacking. Small credit unions are often presented with enterprise-scale frameworks and vendor-driven solutions that do not reflect their operational realities. 

Small and community credit unions face increasing cybersecurity and regulatory pressures while managing limited staff, budgets, and technical resources. For institutions with assets under $500 million, the challenge is not a lack of concern about security but uncertainty about what is truly expected. 

Fastek has outlined a practical, defensible cybersecurity approach that aligns with regulatory expectations without introducing unnecessary complexity. The focus is on exam readiness, leadership oversight, and proportional controls that reflect the institution’s size and risk profile. 

The Reality Facing Small Credit Unions 

Cybersecurity guidance is abundant, but clarity is often lacking. Small credit unions are often presented with enterprise-scale frameworks and vendor-driven solutions that do not reflect their operational realities. 

Regulators do not expect small institutions to mirror large banks. They do expect leadership to understand risk, document decisions, and demonstrate accountability. Consistent with NCUA’s risk-focused examination approach, many examination findings stem from gaps in governance, documentation, and consistency rather than missing or inadequate technology. 

What Regulators Consistently Expect 

Across examinations, several expectations remain consistent regardless of asset size. 

First, policies must exist, be current, and reflect actual practice. Second, controls must be documented and repeatable. Third, leadership must be able to explain how cybersecurity risks are identified, managed, and reviewed. 

For example, examiners do not expect boards to review firewall configurations or technical logs. They do expect evidence that cybersecurity risks are discussed regularly, that reporting is consistent, and that decisions are documented in meeting minutes. 

Examiners often focus less on tools and more on process. Institutions that can clearly show how decisions are made, how risks are monitored, and how responsibility is assigned are better positioned for efficient examinations with fewer follow-up requests. 

A Defensible Cybersecurity Framework 

A defensible cybersecurity framework for small credit unions rests on three pillars: exam readiness, board visibility, and proportional security. 

Exam readiness means maintaining policies, procedures, and supporting evidence that align with regulatory guidance. Board visibility ensures leadership oversight without unnecessary technical detail. Proportional security acknowledges that controls should match the institution’s size, complexity, and risk profile. 

Together, these pillars support consistent decision-making, credible regulatory conversations, and operational continuity. 

Governance and Board Oversight 

Cybersecurity is a governance issue. Boards are not expected to manage technology, but they are expected to provide oversight. 

Effective oversight includes regular reporting on cybersecurity risk posture, incidents, testing results, and third-party relationships. Reports should be understandable, consistent, and tied to business impact rather than technical metrics. 

For example, effective board reporting may include summaries of key risks, recent incidents or near misses, results of periodic reviews, and confirmation that required policies have been reviewed and approved. 

Documentation Over Complexity 

Small credit unions often overestimate the value of additional tools while underestimating the importance of documentation. 

Clear policies, defined responsibilities, vendor agreements, and evidence of periodic review are foundational. Documentation demonstrates intent, accountability, and continuity even when staff or vendors change. 

Well-documented processes often reduce examination friction by allowing institutions to clearly explain how controls operate in practice. 

Third-Party Risk Management 

Most small credit unions rely heavily on third-party vendors for technology and security services. Regulators expect institutions to understand and manage this reliance. 

This includes documented due diligence, clearly defined responsibilities, and periodic vendor review. While services may be outsourced, accountability cannot be. 

Credit unions remain responsible for outcomes, even when controls are operated by external providers. 

Incident Readiness and Response 

Incident readiness does not require a large internal team, but it does require clarity. 

Roles, escalation paths, communication plans, and decision authority should be documented and periodically tested. 

Examiners often ask not whether an incident has occurred, but how leadership would respond if one did. Institutions that can clearly describe their response process demonstrate preparedness and governance maturity. 

What This Means for Credit Union Leadership 

For leadership teams at small credit unions, a defensible cybersecurity program means: 

• Cybersecurity decisions are documented, even when services are outsourced. 
• Boards receive consistent, non-technical reporting on risk and oversight. 
• Policies reflect actual practice, not vendor templates. 
• Responsibility for cybersecurity risk is clearly assigned and reviewed. 

These practices support confidence during examinations and improve internal decision-making. 

Cybersecurity programs at small credit unions succeed when they emphasize clarity, consistency, and accountability. 

The goal is not perfection. The goal is defensibility. 

In a regulatory environment that continues to evolve, institutions that prioritize governance, documentation, and proportional security will be best positioned to adapt without unnecessary disruption. 

References 

1. National Credit Union Administration (NCUA). Information Security Examination Handbook. 

2. National Credit Union Administration (NCUA). Small Credit Union Examination Program. 

3. Federal Financial Institutions Examination Council (FFIEC). Cybersecurity Assessment Tool. 

4. Cybersecurity and Infrastructure Security Agency (CISA). Cross-Sector Cybersecurity Performance Goals. 

5. National Institute of Standards and Technology (NIST). Cybersecurity Framework.