Regulators helping credit unions

Federal regulators are reaching out and helping credit unions and community banks with a series of changes.

On October 3, 2018, Federal regulators ruled that credit unions and community banks can pool resources for anti-money laundering. The Wall Street Journal, citing a statement from the Federal Reserve, the Federal Deposit Insurance Corp., the Treasury Department, the Office of the Comptroller of the Currency and the National Credit Union Administration, reported that the decision was borne out of a working group that the agencies created to improve anti-money laundering processes. The decision is a more significant attempt to help strengthen money laundering defense in the US. However, the sharing of resources does not alleviate the responsibilities of the individual institution. It should also be noted that this does not change the existing legal and regulatory requirements. Additionally, if an institution decides to share resources, it should be done in the same manner as any other business relationship.

Another recent decision at the federal level will potentially make it easier for credit unions to participate in the real estate underwriting process. The threshold requiring a full appraisal for real estate transactions was recently raised from $250,000 to $500,000. The hope is that more credit unions can integrate automated valuation models (AVMs) into their underwriting process. AVM is the name given to a service that can provide real estate property valuations using a mathematical equation combined with a database. Most AVMs calculate a property’s value at a given point in time by further analyzing values of comparable properties. This could allow underwriting tasks to be completed faster, with the potential of increasing loans that credit unions issue using AVMs.


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