Compliance Blog

Posted by Anthony Demangone

As we look toward 2011, I thought I'd spend the next week or so discussing some ideas that might help you in the coming year.  Today, I'd like to talk about citations. Not the kind that you get for double-parking.  I mean legal or regulatory citations that point to a specific part of a law, regulation, or guidance document.

If you hire an outside auditor, attorney, or other consultant, I'd demand that they provide a citation for every finding or recommendation.  Each and every one.  (You're paying them, right?) And if they tell you something is a best practice, I'd follow up with this question: A best practice based on what? All too often, we get calls or emails from credit unions that are trying to understand a recommendation from an auditor or consultant who failed to provide a citation.  So we spend 20 minutes or so trying to track down a citation to confirm the auditor's position.  And that assumes the auditor is correct.  An outside consultant should have no problem providing a citation that is the basis for his or her opinion. (The only exception to this is the negative opinion.  Example: NCUA does not regulate the color of your credit union's logo. You can look as long as you want, but you won't find a citation to support that position.)

Oh, and the same goes for examiners.

So, in 2011, ask for citations.  It will help you verify that an auditor, consultant, attorney or examiner is correct.  And it might force them to be a bit more judicious with their recommendations, knowing that they have to provide some legal or regulatory authority each time they tell you to do something. 

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Happy Holidays, everyone. NAFCU's offices will be closed tomorrow in observation of Christmas.  We'll get back at it on Monday. 

The more I think about it, the next photo is a bit more aligned with the life of a compliance office in 2010.  You hold on for dear life and hope for the best. Here's hoping Santa is good to each and every one of you!