As regulatory expectations intensify in 2025, credit unions are being called to move beyond static documentation and prove their operational resilience through real-world testing. The National Credit Union Administration (NCUA) and the Federal Financial Institutions Examination Council (FFIEC) now prioritize scenario-based exercises as a critical measure of preparedness. These simulations are no longer optional - they are central to demonstrating the ability of a credit union to respond effectively to disruptions.
This shift reflects a broader regulatory trend toward risk-based supervision, where institutions must go beyond just planning. They need to embrace execution and adaptability under pressure. In this environment, tabletop exercises have emerged as the most practical and regulator-aligned method for validating disaster recovery and cybersecurity readiness.
The NCUA and FFIEC have made it clear and credit unions are now under scrutiny. Real-world simulations must be conducted to demonstrate and evaluate response capabilities during disruptions. This includes cyberattacks, natural disasters, system outages, health crises, and economic downturns. These exercises help institutions identify gaps, clarify roles, and improve coordination across departments.
According to the NCUA’s 2025 Supervisory Priorities, tabletop testing is expected to reflect the institution’s size, complexity, and risk profile. The goal is to move from theoretical planning to practical execution - where every team member knows their role and every system has a recovery path.
From documentation to demonstration, five test-worthy Disaster Recovery scenarios have been identified:
1. Natural Disaster
From hurricanes in the Southeast to wildfires in the West, natural disasters can halt operations instantly. Given that more than half of all credit unions are located in areas considered risky from a climate perspective, tabletop exercises are an expectation.
Key components to test:
2. Cybersecurity Breach
Cyber threats remain the top concern for regulators. In 2024 alone, ransomware attacks on financial institutions increased by 37%, with phishing and credential theft close behind. In the past, such institutions referenced the FFIEC’s Cybersecurity Assessment Tool (CAT) for specific guidance on breach response protocols. The growing importance of cybersecurity governance, however, has prompted the National Institute of Standards and Technology (NIST) to recognize new and updated resources for their effectiveness.
Key components to test:
3. System Outage or Technology Failure
Whether caused by internal error or vendor disruption, system outages can cripple member services. The average downtime cost for financial institutions is estimated at nearly $6,000 per minute. Regulators want to see how credit unions manage these failures in real time.
Key components to test:
The COVID-19 pandemic reshaped how financial institutions think about continuity - not just in terms of remote work, but in sustaining member trust and operational resilience under prolonged strain. Regulators now expect credit unions to go beyond policy documentation and actively rehearse their response to health-related disruptions. These exercises should reflect lessons learned from past crises while preparing for future scenarios that may unfold differently.
Key components to test:
In 2025, the NCUA’s stress testing framework challenges credit unions to prove their resilience through scenarios simulating a global recession, real estate collapse, and market volatility. These tabletop exercises help credit unions identify gaps, clarify roles, and build confidence in their ability to serve members during the most financially adverse conditions.
Key components to test:
Overall, regulators want to see tested, documented, and updated plans - not just theoretical frameworks. Tabletop exercises offer a structured, discussion-based simulation that allows credit unions to walk through their response step-by-step. These exercises:
According to a 2024 FFIEC survey, institutions that conducted annual tabletop exercises were 60% more likely to pass their cybersecurity and disaster recovery audits without remediation.
Failing to conduct tabletop exercises and disaster recovery simulations is more than just a missed opportunity - it’s a regulatory risk. Scenario-based testing is a compliance standard, not a suggestion. Credit unions who fail to meet these expectations are putting several things at stake.
Cayuse Operational Resilience (OR) services are designed to help credit unions meet regulatory expectations without the burden of building exercises from scratch. Our premade, regulator-aligned tabletop scenarios are built to reflect NCUA and FFIEC priorities - so you can focus on execution, not design.
What you get with Cayuse OR:
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Cayuse can help your credit union stay prepared, compliant, and member focused.