As credit unions prepare for 2026, the risk landscape is shifting faster than ever. From evolving economic pressures to regulatory expectations and technological advancements, relying on outdated assumptions can leave institutions exposed. In this environment, four key strategies, ranging from testing assumptions to independent review, can help credit unions navigate uncertainty, strengthen decision-making, and build confidence in the year ahead.
Static Assumptions Don’t Survive
What’s ahead for credit unions in 2026 is coming into focus. The economic and regulatory signals are clear. Credit risk, liquidity sensitivity, and model governance will no doubt demand continued scrutiny. While the industry is resilient, loan portfolios face sustained pressure from shifting interest rates, rising delinquencies, and slower deposit growth. Credit unions that navigate 2026 with old or inconsistently tested assumptions, risk accurate operational management actions and strategic decisions with incomplete or misaligned inputs. That’s especially the case within their reserve methodology, liquidity planning, risk forecasting models, and the adequacy of assumptions in enterprise risk plans.
Sheila Balzer, Lead Audit Partner for SingerLewak Credit Union Services, suggests, “CECL validation should not be viewed as a checkbox exercise. It should confirm that a credit union’s model assumptions still reflect reality. Not the market we used to have.” And she adds that, “Assumptions often fail quietly, long before the model does,” underscoring the importance of testing inputs continuously, not just periodically.
Model Validation Must Reflect Today’s Reality
SingerLewak’s Credit Union Services team has found that independent validations routinely surface opportunities to strengthen assumption logic, improve model documentation, and reinforce audit defensibility. “Most credit unions are pleasantly surprised at how much strategic clarity comes out of a validation engagement,” Sheila offers. “The benefit goes far beyond compliance, it gives leadership confidence in the numbers guiding their next moves.”
Credit unions increasingly rely on models to forecast credit losses, manage asset liability exposures and needs, support lending decisions, evaluate liquidity durability, and inform strategic risk planning. But even well-built models degrade without ongoing monitoring, outcomes testing, and independent validation. Regulatory expectations make one thing clear: model risk management must be objective, repeatable, and regularly verified by an independent party.
Liquidity Stress Needs Reality Based Deposit Behavior
Pam Easley, Managing Director for Risk Management at SingerLewak states, “There needs to be a heightened focus on upgrading credit risk programs as the landscape becomes more complex.”
Beyond credit loss modeling, 2026 will test credit unions’ broader risk ecosystem. As institutions deepen vendor partnerships for analytics, core processing, fraud detection, ALM, and AI-supported underwriting tools, third-party risk reviews must mature in lockstep. Liquidity stress assumptions must reflect real cash-flow behavior and individual market conditions. Reserve forecasts must align with portfolio conditions. And leadership teams must trust not only the outputs — but the assumptions powering them, double checking that the assumptions reflect the true behavior of the credit union.
Independent Review
As the industry reinforces their 2026 planning, now is the moment to validate assumptions, strengthen model governance, and equip leadership with confidence in the data guiding the road ahead.
SingerLewak Credit Union Services specializes in independent CECL model validation, outcome analysis, vendor model risk review, liquidity assumption testing, and model governance support for credit unions of all sizes.
Connect with SingerLewak Credit Union Services to begin the dialogue and prepare for 2026 with clarity, continuity, and confidence.
Turn Uncertainty Into Actionable Insight
By focusing on these four strategies, credit unions can turn uncertainty into actionable insight. Empower leadership to make forward-looking decisions through ensuring models are realistic and updated.
The new year is an opportunity to reinforce resilience, strengthen governance, and position your institution for deliberate, sustainable growth. And SingerLewak is here to help. Contact Sheila Balzer to get started!
Sheila Balzer
Partner, Assurance & Advisory
[email protected]
720.330.8160
