Washington Credit Unions Respond to Regulatory Landscape With New Compliance Partnership

April 5, 2012, (Olympia, WA) – Reflecting the innovation the credit union industry is known for, Gesa Credit Union, iQ Credit Union, Salal Credit Union and Washington State Employees Credit Union today announced they have formed a compliance partnership with the creation of a credit union service organization (CUSO) called the Northwest CU Collaboration that will focus on regulatory compliance issues. The new CUSO is a limited liability corporation and will be a jointly-owned subsidiary of the four credit unions.  

With the increasing pace and volume of regulatory changes affecting not-for-profit cooperatives, WSECU convened a roundtable group of Washington credit unions in 2010 to research the viability of leveraging shared resources to meet the industry’s growing compliance needs. Following a period of research and analysis, the final four credit unions committed to participate and provide initial funding for the partnership.

“We are all feeling the pressure to assure our institutions are meeting the compliance expectations of our members and our regulators,” said Christina Lethlean, President & CEO of Gesa Credit Union in Richland, Wash.  “At the same time, we want to be as efficient with our resources as possible to assure best value back to our membership.”

Extensive staff interviews and analysis of compliance activities at seven credit unions led to the group identifying several opportunities for collaboration. More than 40 employees were interviewed about compliance operations at their credit unions.  The results showed that most institutions conduct many of their compliance processes in a similar manner; therefore, consolidation of some of those services was viable for multiple institutions.

“The cost of compliance is a growing operating expense,” said Roger Michaelis, President & CEO of iQ Credit Union in Vancouver, Wash. “Changes are coming at credit unions faster than ever. It makes sense to work together for the greater good of our industry in as efficient a manner as possible.”

The partnership hired attorney and credit union veteran Terri Salinas as its first employee and Director. Salinas comes to the partnership from BECU where she served as Corporate Counsel for compliance issues. She previously worked as Vice President of Risk Management for Gesa Credit Union.  As Director, Salinas will be responsible for creating the business plan and structure for the new CUSO.  The CUSO will have a board of managers comprised of representatives from the four credit unions.

The first general areas of focus for the CUSO may include compliance training for staff; compliance reviews for marketing materials; legal reviews; vendor reviews and compliance audits. In addition, the partners foresee the potential for other joint services beyond compliance.  Other credit unions eventually may be offered opportunities to use the CUSO’s services.

“We heard a lot of interest for the idea during our research period,” said Carol Belland, Executive Vice President of Salal Credit Union in Seattle. “We think other credit unions will be watching as we get the partnership up and running and will quickly see the benefits of tapping into such a valuable pooled resource. Compliance is too big of an issue for all credit unions not to figure out how to handle it effectively and efficiently.”

It is expected that the Northwest CU Collaboration CUSO will be operational in the third quarter of 2012.

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