Compliance Blog

Posted by Anthony Demangone

Here are a few things kicking around in my email inbox.

Regulatory Alert.  NCUA has issued Regulatory Alert 10-RA-07, which announces updates to the FFIEC Retail Payment Systems Handbook.  The handbook covers topics from Check 21 to ACH.  For those of you not familiar with FFIEC handbooks, they are a great resource. Here's a link to all of the handbooks.  The booklets are a treasure trove of useful information.

LUA.  NCUA has issued its third Letter of Understanding and Agreement of this year. NCUA noted deficiencies in six different risk areas.  I've said it before, and I'll say it again.  NCUA appears to be tightening the screws on credit unions.  NCUA officials have indicated that they plan on using administrative actions sooner than in years past in order to deal with operational issues at credit unions.  While the LUA does not carry with it a civil money penalty, the affected credit union has to complete a number of major projects that will involve outside consultants.  Without a doubt, the credit union will be working around the clock to meet NCUA's demands.

Supervisory Committees.  NCUA Board member Hyland reiterated the importance of credit union supervisory committees during a recent speech in Baltimore, Maryland.  She indicated the following:

"maintain appropriate independence. Your auditor should report to you and not management or the board of directors. (This) concept is universal regardless of the size or composition of the organization. When we as a regulator and insurer see serious breakdowns in these basic principles of independence, we often encounter serious and emerging problems in the organization. Erosion of the principles is often symptomatic of a larger lack of diligence and integrity of the overall control environment.”