No Training Needed? Think Again

by: Chris Collver, Manager of Research and Information, California and Nevada Credit Union Leagues

Some credit union executives and compliance officers are asking: What training for a credit union’s staff or board members is required by law or regulation?

There aren’t many training requirements specifically stated in state and federal laws, or regulations. However, even when training isn’t specifically required by statute or regulation, it’s still critical your credit union provide job-appropriate training for staff and board members.

While staff members are responsible for carrying out many of the day-to-day requirements contained in regulations, and board members have the broad responsibility of directing and controlling the affairs of a credit union, both groups have a shared responsibility to ensure your credit union complies with all applicable laws and regulations. In order to do so, they need to know the “what” and “why” of those laws and regulations.

Below are areas of training that are specifically stated in laws or regulations:

• Bank Secrecy Act [Section 5318(h)]—Requires financial institutions to have an anti-money laundering program that includes an ongoing employee-training program.
• NCUA Rules and Regulations §748.2(b) and (c)—Requires all federally insured credit unions to have a Bank Secrecy Act program in writing, approved by the board of directors of the institution, and noted in the minutes. The program must provide training for appropriate personnel. However, no interval is mandated for providing that training.
• Regulation CC: Availability of Funds and Collection of Checks [229.19(f)]—Each financial institution must establish procedures to ensure it complies with requirements of a regulation, and must provide each employee who performs duties subject to the regulation with a statement of procedures applicable to that employee. No interval is mandated for providing that training.
• Regulation B: Equal Credit Opportunity [Commentary §1002.15(c)(2)]—This section states that identifying and then training and/or disciplining the employees involved is an appropriate corrective action for problems discovered as a result of a self-test for compliance with this regulation. Many violations of the Equal Credit Opportunity Act involve discrepancies between written policies and the actual practices of employees involved in the lending process. By keeping your staff trained on those requirements, many of these discrepancies can be avoided.
• Safeguarding Member Information [Appendix A III(C)(2) to NCUA Part 748 Guidelines]—Federally insured credit unions must train their staff to implement the information security system. Appendix A to Part 748 outlines specific requirements for the development of the information security system.
• Financial Literacy for Board Members of Federal Credit Unions [NCUA Rules and Regulations §701.4(b)(3)]—Board members of federal credit unions must have or gain an understanding of basic finance and accounting principles within six months after election or appointment. A director must have the ability to understand the balance sheet and income statement and ask, as appropriate, questions of management and auditors. There is currently no similar specific requirement for California or Nevada state-chartered credit unions, but providing such training for your board members would probably fall under the category of not a bad idea.
• Supervisor Harassment Prevention Training [California Government Code §12950.1]—California employers with 50 or more employees must provide sexual harassment prevention training to all supervisors in California. Training must take place within six months of hire or promotion and every two years thereafter. A reminder: Don’t let the lack of requirements listed here fool you. Even if there is no specific training requirement contained in a regulation, you are required to be prepared for compliance purposes. Therefore, the appropriate individuals need to be aware of what’s necessary to comply.

Chris Collver is Manager of Research and Information for the California and Nevada Credit Union Leagues. His responsibilities include tracking and analyzing federal and state legislation and regulations of importance to credit unions. He works extensively with the Leagues’ advocacy teams to provide data, analysis, and recommendations on new and proposed legislation and regulations, including drafting legislative language and preparing comments to regulators.

Chris joined the Leagues in 2000 after working for 15 years at a credit union in Omaha, NE. While there, he worked in a variety of operational roles, including 10 years managing the credit union’s call center, data processing, ACH, and ATM and debit card processing departments.  www.ccul.org

Chris holds a degree in business administration from California Baptist University.