Musings from the CU Suite

Written by Anthony Demangone

A few weeks ago, I addressed a group of credit union professionals at NAFCU’s Management and Leadership Institute.  Each professional was trying to push themselves in their careers. There was a good deal of internal soul searching.

Where am I strong? Where am I weak?  Where must I improve?

The week hammered away at leadership.  No problem there.  The week hammered away at finance and accounting basics.  A few groans were heard.  And I took some time to hammer away at how to manage compliance risk.  As I walked toward the front of the room, I could see fear in the eyes of the audience.

Seventy-five minutes.  On compliance.  Ugh.

Compliance? I thought they were kidding...

If you want to move up, you need to get over that, my friends.  Just as a great credit union leader must be able to navigate a balance sheet, he or she must be able to manage compliance risk. Here are four reasons why.

1.      Life has rules. We are a highly regulated industry.  Get over it. There are rules for everything.  And those rules must be followed.  A strong compliance risk management program keeps your credit union on the straight and narrow path.  The work is not easy, but it is rewarding.  

2.      Compliance is insurance. You’ve heard this before: You can pay me now, or you can really pay me later. If you think a good compliance officer is expensive, just try complying with a Letter of Understanding and Agreement from NCUA.

3.      Compliance makes you nimble. A savvy mortgage strategy must take into account the incoming mortgage regulations from the CFPB.  If you don’t know the rules of the road, you’re going to be putting out regulatory fires day-in and day-out.  Have you heard these phrases before?  I didn’t know we could do that.  Or even worse…I didn’t know we couldn’t do that.  Guess what?  A good compliance offer knew both of those things.

4.      Compliance sees the future. A good compliance function at your credit union can read the regulatory and legislative tea leaves.  What will happen with mortgage lending?  Overdraft protection?  Interchange?  The better you are at compliance, the better you’ll be at addressing those questions, and more.

So, you want to move up at your credit union? Let me ask you this…on a scale of 1-to-10, how well do you understand compliance risk and how to manage it?  If that number is lower than you’d like, don’t worry.  You’ve got nowhere to go but up, assuming you’re willing to put in the time and effort.

Where to start? Try taking your compliance officer out to lunch.  Learn about his or her day.  You’ll be amazed at what you hear.

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Editor's note.  I'm completely biased when it comes to compliance.  I admit it.  And I also admit that I knew a lot more about compliance when I headed NAFCU’s Compliance Division.  And I double-dare you to attend NAFCU’s Regulatory Compliance School this spring.  I met many of my best friends there.

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Happy Halloween everyone!  So, here's my costume, which I debuted at a partly last weekend. 

 

ZZ Top, or Willie Robertson?