2015's Best Lessons In Making The Most Of The Compliance Burden

Eight strategies and lessons from credit unions show how to handle compliance and risk concerns.


It’s no secret that financial institutions face a significant compliance burden. With so many new rules and regulations out there, compliance and risk management has become more complex and costs have risen, requiring of credit unions a greater investment of time, money, and resources.

Throughout 2015, however, we’ve profiled different strategies credit unions are taking to combat this rising burden. Here are some reader favorites. 

8. 2 Ways To Combat Internal Fraud

Credit unions are in the risk management business, although that doesn’t mean all risks are justifiable; especially those that leave credit unions vulnerable to internal fraud. In 2014, $28.6 million of the $30.4 million in losses to the National Credit Union Share Insurance Fund from the 12 credit union failures were related to internal fraud. Fortunately, there are several responsive controls credit unions can use to mitigate the harm.

7. Vendor Management Makes Mazuma More Transparent

As part of a three-year reorganization plan, Mazuma ($535.6M, Overland Park, KS) has expanded its use of its longtime vendor management consultant from a depository for due diligence documents to its contract negotiator and performance monitor. Cost reductions, process efficiencies, and compliance comfort are just some of the many benefits of this new approach.

6. Banking’s Newest Compliance Enigma Comes With A Data Plan

Mobile security is an opportunity wrapped up in a problem. It’s not just another link in the transaction chain like a new branch or a unified fleet of ATMs, it’s a conglomeration of hundreds of different devices from different manufacturers, all of which are further modified and customized by the end user. An abundance of devices, each with their own respective compliance unknowns, has muddied the waters for many financial institutions. Here’s how to get clarity.

5. A Strategy To Test The Need For In-House Counsel

Started by Boston University’s School of Law in 2012, the In-House Counsel Fellowship Program presented great opportunity for Digital Federal Credit Union ($6.5B, Marlborough, MA) to test how it could benefit from in-house legal assistance, especially considering all the new regulatory requirements and consumer regulations presenting a compliance challenge to credit unions.

4. How Back-End Cooperation Will Help 6 Credit Unions Cut Compliance Costs By $200K

Six small credit unions have projected more than $200,000 in compliance costs savings over the next two years with their new CUSO, rkGoBig, which combines back-office operations to allow the cooperatives to gain economies of scale and better serve their members.

3. Is Outsourced Compliance Right For Your Credit Union?

The average credit union compliance officer makes $56,000 per year. A good chunk of change for a position that does invaluable work for an organization. But what about outsourcing compliance? Reducing compliance costs can save credit unions thousands of dollars annually and help smaller institutions remain independent.

2. Does Your Credit Union Need A Chief Risk Officer?

Six years ago, TTCU ($1.5B, Tulsa, OK) named Stephanie Jones as its chief risk officer. She had worked for the credit union since 2002 in charge of its internal audit and compliance department and before that she was NCUA’s supervisory examiner in the state of Oklahoma. Jones talks about her responsibilities as a chief risk officer, how her NCUA experience continues to influence her work, and the skills she believes employees in this position need to succeed.

1. Vendor Management In A Brave New World Of Compliance

Since 2013’s Target breach, NCUA is contemplating more auditing requirements for IT vendors, and credit unions such as Purdue Federal Credit Union ($954.2M, West Lafayette, IN) are undergoing audits of their vendor management programs. The credit union identifies pain points, best practices, and considers the future of compliance.