Some Good News Re: Compliance, Low-Cost Resources Available for Credit Unions

The bad news is that compliance with federal regulations continues to become more and more complicated.  Changes are occurring at light speed.  This poses a particularly onerous burden on credit unions that often do not have the internal resources available like other financial institutions.  The good news is that there are a number of free and/or low-cost compliance resources, if you know where to look for them.

First, every credit union should have a documented compliance policy or program.  An internal compliance program allows your credit union to minimize potential liability, ensure that your members receive timely and accurate disclosures about the costs of their accounts and financial transactions, and protects the credit union’s reputation and the trust your members place in you.  An effective compliance program should include, among other things, a procedure to identify and apply new and changing regulations, a periodic review of policies and procedures, training for staff and volunteers, and a process to ensure that new products and services are in compliance with regulatory requirements.  In addition, an effective compliance program should include a process to monitor internal operations for compliance with existing regulations and to quickly address any compliance issues or violations that are noted.

While hiring a full-time compliance officer or an outside consultant to address each of these components is an ideal solution, for small credit unions with limited budgets there are free and/or low-cost resources to help you.

Monitoring New and Changing Regulations

One of the best resources available to credit unions to monitor and understand new and changing regulations are your trade associations.  Both state credit union leagues and the national credit union associations (CUNA and NAFCU) offer a host of free compliance resources to their members, including regulatory alerts that provide summaries of new and revised regulations, toll-free compliance helplines, compliance blogs, live and archived webinars, and training materials.

The Federal regulatory agencies also provide a host of free compliance tools to assist credit unions and other financial institutions.  The FFIEC at www.ffiec.gov offers very useful FAQs on both the SAFE Act and HMDA.  You can also download free software from this site for filing your annual HMDA Loan Application Register (LAR).    FinCEN provides detailed instructions on BSA compliance, e-filing and copies of the new CTR and SAR electronic forms at www.fincen.gov. You have access to all NCUA Regulations, Letters to Credit Unions and legal opinion letters issued from the NCUA General Counsel’s Office on the NCUA website at www.ncua.gov. The Consumer Financial Protection Bureau (CFPB) has begun posting on its website www.consumerfinance.gov the first of a series of compliance tools to facilitate compliance with the host of new mortgage regulatory changes scheduled to go into effect in January, 2014.

Policies and Procedures

Policies and procedures are only useful if they are current and distributed to those staff members that need to follow and enforce them.  NCUA’s Office of Small Credit Union Initiatives can be a resource to assist with the development of written policies.  Your peers are another valuable resource.  Most credit unions are more than willing to share copies of their policies.  Just make sure to review the policies and make the appropriate changes to reflect your internal operations.  The NCUA AIRIES Exam Questionnaires are another source you can use to identify what policies are required and what elements should be addressed in particular policies.

New Products and Services

Your trade associations are a valuable resource in identifying what the regulatory requirements are for new products and services.  If you are using a vendor to assist with the implementation of a new product or service, ask for a list of references.  When contacting these references be sure to ask whether the reference or their examiner noted any particular compliance issues that needed to be addressed.  A quick search through NCUA’s Letters to Credit Unions can provide you with any specific guidance that NCUA may have issued regarding any concerns or recommendations it may have for particular products and services.

Training

Your trade associations along with the NCUA Office of Small Credit Union Initiatives offer a variety of training options, many at no cost.  NCUA also offers volunteer financial training through its Learning Center for Board Training program.

Compliance Monitoring

This can be the most time consuming and most challenging aspect of your compliance program, but NeighborBench can help.  Our cloud-based technology platform allows us to provide expert review of your compliance with federal consumer regulations at a much lower cost than the traditional “boots-on-the-ground” model.  We also offer special pricing for small credit unions.  For more information, visit our website at www.neighborbench.com or call us 888-97-BENCH.

Jane Pannier

Jane Pannier

Jane Pannier is Senior Vice President and in-house counsel for AffirmX LLC, a developer of an innovative remote compliance review solution. Ms. Pannier is also SVP of AdvisX, a CUSO ... Web: www.affirmx.com Details