Why credit unions are utilizing compliance management systems

Managing compliance is a complicated undertaking for credit unions of any size. The roster of regulations affecting credit unions continues to grow, with hundreds of pages of new rules added each year. Monitoring all areas for compliance can be a significant challenge; even if a credit union has staff dedicated to compliance it is still an uphill battle.

Increasingly, credit unions are making it a priority to develop and implement a compliance management system (CMS) as a way to ensure compliance with federal consumer protection laws and regulations, as well as gain visibility and control over their compliance efforts. One way that credit unions are approaching this is through technology where their written documents, functions, processes, controls, and tools are stored in a single repository that cuts across all areas of the credit union, from operations to administration to marketing and advertising.

There are four elements to a strong and effective CMS:

• Board and management oversight of compliance policies and activities. Examples are policy approvals, reviews of activity reports, and reviews of monitoring/audit.
• A compliance program consisting of policies, procedures, training, monitoring and corrective actions.
• Responsible, responsive handling of consumer complaints, including procedures, monitoring, and reports.
• Compliance audit program, including scope and coverage, report distribution, corrective actions, and determination of the adequacy of the program.

For those credit unions that utilize technology, they benefit by having the ability to monitor compliance from a centralized resource, a single source for visibility, tracking, and reporting of activities, and in some cases automatically generated rule change notifications.

Stanford Federal Credit Union uses the ComplySight program to organize its compliance activities and has lightened its management burden in several ways, including streamlining product development.

As a centralized, web-based program, regulations within the ComplySight program remain current and are automatically updated with changes. A customized dashboard applies current compliance standards to every activity and can help balance actions taken by credit union departments against a variety of compliance directives. This type of technology helps a credit union view new or revised regulations and determine which ones are in line with their products and services. The answers are easy to find.

Designated managers and area specialists can access the program to assess their projects, review and enter comments on specific rules and other key aspects of product and service development efforts. Compliance requirements become part of the hands-on creative process and any red flags are caught and corrected quickly.

When it comes to Marketing, the program can keep electronic and printed messaging and collateral in alignment with all the necessary inclusions and disclosures that need to be part of the message. That saves time, effort, and money by assuring compliance from the start.

Stanford also uses ComplySight to keep projects on schedule, communicating with credit union staff members to ensure they stay current with assigned tasks, and for complaint resolution, since it provides a valuable record of complaints and the actions taken in response.

Using a program like ComplySight as a part of a CMS not only helps a credit union identify and correct compliance gaps but can also provide monthly reviews and ensure that findings are shared with staff. By tracking the credit union’s progress in key areas of compliance and reporting it clearly, information can be readily shared with examiners.

As the credit union industry evolves, the daily challenges will continue to grow. Good compliance practices will help your credit union meet those challenges successfully.