How should credit unions handle updates to member information?

The correct approach for credit unions to handle updates to member information is to update regularly on a risk basis. This method ensures that member information remains accurate and up-to-date, which is essential for effective risk management and compliance with regulatory requirements.

Regular updates help credit unions identify any discrepancies or issues in a timely manner, such as changes in a member's financial status, contact information, or overall risk profile. By monitoring and updating member information on a risk basis, credit unions can better assess risks associated with each member, which is crucial for implementing effective anti-money laundering (AML) strategies and fulfilling obligations under the Bank Secrecy Act (BSA).

This proactive approach not only contributes to compliance but also enhances the overall safety and security of the credit union’s operations and its member’s accounts. In contrast, of the other options, only updating when requested by the member, only when significant changes occur, or not updating at all can lead to outdated information, which may increase vulnerability to fraud or compliance failures.