Compliance Blog

Posted by Anthony Demangone

I've written a bunch about NCUA's Examiner's Guide.  This is a must-read, go-to resource for compliance officers.  For example, NCUA has created a number of useful charts that are found within the guide. 

Conflicts.  Certain individuals cannot serve in certain positions at a credit union.  For example, an employee of the credit union may not serve on the credit union's supervisory committee.  That makes sense, right?  You don't want an employee covering up his or her shenanigans.  Certain prohibitions like this are clearly laid out in regulation.  But NCUA also feels that other prohibitions are implied by sound internal controls.  Go to appendix 4A of the Internal Controls chapter of the guide, and you'll find a useful chart that highlights the prohibitions, both those found in regulation, and those that NCUA feels are required by sound internal controls.  Remember - if you have a hard time opening that link from the blog's daily email, click on the title of today's blog.  That will take you directly to the blog, and you should be able to download the document there. 

Risk Management.  Chapter 2 of NCUA's Examiner's Guide, titled "Scope Development," contains a chart that examiners can use to gauge the risk of your credit unions.   It is attachment 2.1 of the chapter.  It may be worth a quick scan or two. 

These are just two examples.  If you are researching a subject, I'd see if NCUA's examiner's guide addresses it.  If so, give it a quick review.  I've found it to be very useful over the years.

Elizabeth Warren.  If you have some spare time, check out this episode of The Daily Show.   (Here's part 2 of the interview.)  (Here's part 3.) Elizabeth Warren was a guest on the show, and she vowed to protect consumers from "word-barf" - the legalese that is found in many lending contracts.  (Her words, not mine.)  She talked about a number of issues, and it really is worth your time if you are a compliance officer.  Here are my take-aways. 

• She's very effective. I'm sure she'll be able to get on this show, and others, whenever she wants.  If a problem bothers her, she can shine A LOT of light on it, very quickly. 
• She continues to believe that consumers cannot currently determine the cost of financial products, even with the Credit CARD Act and RESPA reform. 
• There wasn't that much discussion on managing compliance burdens for credit unions and community banks.  In fact, it never came up. 
• I'm not trying to beat up Ms. Warren. Whether one agrees or disagrees about the existence of the CFPB is irrelevant.  It exists. The CFPB will do its job. I'm simply trying to highlight the fact that this agency will increase compliance risks for all credit unions.  Credit unions just need to be prepared. 

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Have a great weekend, everyone!