Credit union leagues are known for their advocacy efforts in pushing for or fighting against legislation on behalf of the industry, but they’re also a valuable resource to credit unions in other ways. Of particular importance in this regulatory environment is that many leagues and associations offer compliance services and networking opportunities to help credit unions meet new requirements.
The Ohio Credit Union League serves as an example of the countless ways credit unions have to stamp out regulatory confusion. Formed nearly 80 years ago, today the Ohio league counts 271 of the state’s 365 credit unions as members. Carole McCallister, manager of shared compliance services for the Ohio league, says leagues, associations, and other credit union partners are valuable resources for helping credit unions meet their everyday needs. The Ohio Credit Union League provides shared compliance services; a file-sharing library that contains laws, regulations, and sample forms; and educational content and services.
Many credit union compliance officers wear multiple hats and welcome services that ease their workload. Additional help is even more welcome in today’s regulatory climate in which NCUA and the Consumer Financial Protection Bureau are proposing a tide of new regulations in response to the Dodd–Frank Wall Street Reform and Consumer Protection Act. Unfortunately, hiring additional compliance staff is not a feasible solution for many credit unions. First, many credit unions only need an additional full-time compliance officer when they need to implement large amounts of final regulations within a short duration of time. Second, the high demand for the services of a full-time compliance officer means they can require, and receive, premium wages for their time and skills.
To ease the burden of increasing regulation coupled with a lack of available compliance officers, the Ohio Credit Union League has developed a program in which a compliance expert splits time among three or four credit unions, typically spending one to two weeks addressing one credit union’s needs before moving on to work with another.
“Shared Compliance Services is a product our league developed with the Georgia Credit Union affiliates and New England League,” McCallister says. “The program is targeted to credit unions that are large and complex enough to need someone who is a compliance specialist but not quite large enough to hire its own staff.”
Shared compliance gives credit unions a way to ramp up compliance response to a new regulation. It also takes much of the burden out of vetting potential compliance employees. According to McCallister, the leagues conduct an extensive recruiting process for the credit union and then trains the chosen specialists, who hail from a variety of backgrounds and have substantial experience with financial institutions and the law.
McCallister says some credit unions know exactly what they need to accomplish when the compliance officer arrives. Others need to conduct a kind of internal audit to ensure policies, procedures, and disclosures are all in compliance. For credit unions that don’t have a detailed plan of what they need, the compliance specialist can start with answering questions and addressing points of confusion.
Like many leagues, The Ohio Credit Union League also has on-site staff that field phone and email inquiries for credit unions that need immediate help. In fact, the league’s help hotline and email address are listed as the first tool on its compliance webpage, and it strives to provide answers within a few hours of receiving a question. Credit unions often turn to the hotline channels simply for a second set of eyes on a problem or solution. For example, a credit union’s marketing department might call in regards to a new promotion. The marketing department can forward the promotion materials to the league staff and ask it to review the advertisement to determine whether it complies with Regulation Z disclosure rules.
Sharing A Library
Several leagues provide informational products that member credit unions can study and use by themselves. For example, credit unions in 42 states, including Ohio, have access through their league to a product called InfoSight. InfoSight is a comprehensive online compliance resource that provides regularly updated regulation information. It has more than 160 compliance topics, such as the Bank Secrecy Act, arranged into 14 different groups. Each compliance topic includes an executive summary or description, an analysis of how the topic affects credit unions, and the steps a credit union must take to comply with the regulation. Users can read FAQs, look at checklists, and click on resource links to read the actual laws, rules, and regulations.
The site also incorporates CUNA’s E-guide on regulatory issues. InfoSight has 48 different model policies that credit unions can adjust to meet their own needs. The product serves as a broad resource for credit unions conducting compliance research, says Todd Mason, COO of League InfoSight.
“We approach it from an executive summary perspective,” Mason says. “Whether you’re a CEO, a marketing person, or the chief compliance officer, you can look at the compliance issue and in pretty quick form understand what it is all about.”
According to McCallister, Ohio credit unions are using InfoSight for its concise answers instead of expecting an overload of in-depth information. They are lapping up information on topics from late fees to employment issues in easy-to-find and digestible bites, she says.
In addition to online services, the Ohio Credit Union League provides educational sessions to credit union staff. The league’s compliance staff is available for one-on-one, small group, or classroom training, whatever a credit union needs.
“A lot of training is handled by the Credit Union National Association, but state leagues are trying to coordinate with CUNA to make sure information gets out there,” McCallister says.
The Ohio league promotes education by facilitating collaboration among and between its member credit unions. League tools such as discussion groups encourage people to post questions and share answers and input with other credit unions. And a file-sharing library gives compliance officers the opportunity to conduct their own research, pull documents from other executives, and share their own documents.
Finally, the Ohio league offers education in the form of a league newsletter. League staff provides updates of recent regulatory changes and outlines what’s coming on the horizon. The newsletter typically covers not only national regulations but also what state regulators are doing and how their actions could impact a credit union’s operations.
Leagues are reaching out to work directly with regulators while regulations are working through the proposal stage and are waiting to be finalized. Leagues also are putting forth a lot of effort into figuring out how to ease credit unions into the structure created by the new regulator on the block, the Consumer Financial Protection Bureau.
“The CFPB and NCUA are trying to do some extra regulating on safety and soundness,” McCallister says. “So they’re asking for things like interest rate risk management programs.”
As compliance officers start to develop these programs, especially in cases where the credit union is implementing the program for the first time, their league is likely to have plenty of resources to help guide the way. Credit unions that turn to their state groups for compliance help will find they are not alone.
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