Navigating the Regulatory Environment
Posted by Steve Gibbs, CUCE, BSACS, AVP Shared Compliance, Credit Union Resources, Inc on 9/20/2017

Let’s face it, the onslaught of regulatory compliance changes and additions are out there like a field of land mines just waiting to be stepped on.  We soldier on, trying to pretend they aren’t there but knowing the risk of hitting one could be the end of our credit unions and even our careers.  What we need is a map, a GPS, or some kind of “compass” to navigate us through the dangerous and often confusing regulatory landscape.  The following are some simple and very general  guideposts to keep you on the “safe” path and away from those things that could ultimately “blow-up” in your face.

Plot a Safe Course:  We all have a strategic plan that keeps us moving forward with actions necessary to meet our goals.  What we need to remember is that our industry is constantly changing with new technologies and products being rapidly introduced.  There are always regulatory ramifications with any new product or service.  For example, what regulation/regulations govern this item? Should periodic risk assessments or audits be performed? Are there mandatory training/certification requirements that must be upheld?  Will we need new or expanded policies or procedures to implement this? In short, the Risk/Compliance Officer should be the final stop in preparing a safe passage for any product or service that is introduced to members. 

Know the Landscape:  Most credit unions are regulated by appointed authorities in their home states or  by the National Credit Union Administration (NCUA), if federally chartered.  Credit unions should remember that although the newly created Consumer Financial Protection Bureau (CFPB) doesn’t directly regulate them, it still has authority over regulations once governed by the Federal Reserve Board.  We are subject to many of these regulations, therefore there is an effect every time they alter or introduce regulations. Additionally, there are rules like Telephone Consumer Protection Act (TCPA) and ADA Web Site Accessibility.  Although most credit unions have not been subject to these, from a risk perspective, we have to understand them as they generate class action suits. 

Be Prepared: Regulatory changes are frequent and, in some cases, time consuming.  Many of us can’t afford an individual, dedicated Risk/Compliance Officer.  In some cases, duties can be shared by two or more members of staff (as long as they are well documented and specified for each person).  Outsourcing is another alternative for cost-effective regulatory and compliance solutions for those who can’t afford the extra employee.  In addition, staff training is always an effective use of time and resources.  A well-trained staff can sometimes fill in gaps when staff are missing or absent and ultimately save money through understanding  and reducing the potential of what might be costly regulatory violations.

Maintain Control – No Coasting:  It’s so easy to let things go when you have a good exam or audit.  We have to consider that there are only a limited number of items that can be reviewed within the set times allotted for examiners and auditors.  The key here is to keep those items that have been already looked at on the radar while continuing to scrutinize areas that could be the next focus of these groups.  This can only be accomplished through diligent research and review of trends and issues in trade periodicals, newspapers, white papers, industry internet sites and communication with state and federal advocacy representatives.  That’s why it’s always better to have more than one person (even consider a Risk Management/Compliance Committee made up of specific officers) to be on the lookout for relevant items and issues.  

In short, know the road that you travel on.  Put experienced Risk/Compliance professionals in the “driver’s seat” and keep your eyes to the horizon for new rules and changes to laws and regulations. If you need further assistance contact Steve Gibbs, AVP, Shared Compliance Resources at (office) 800-442-5762, or (cell) 214-402-7640.


Categories: Compliance
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