DES MOINES, Iowa—Strategic compliance management systems will be critical to all FIs by 2020 insists one analyst, who says CUs must get moving now to establish the systems that will eventually be required by examiners.
“Developing and maintaining a strategic compliance management system will be crucial,” said Justin Hupfer, PolicyWorks CEO. “Not only is a systematic and well-documented approach a great way to stay on top of the cooperative’s regulatory compliance, it’s something on which examiners are beginning to insist.”
Hupfer said that currently while this approach to compliance is more commonly seen with banks, he expects increased compliance scrutiny across all regulatory agencies, given the Consumer Financial Protection Bureau’s influence on both the bank and credit union spaces.
“Innovation will be critical to compete, yet credit unions can be shy about developing new products, process and solutions because of the question mark posed by compliance,” said Hupfer. “A systematic and strategic compliance management system can lessen some of that guesswork and also demonstrate to examiners how seriously the credit union is about ensuring compliance, even as it innovates to improve the financial lives of consumers.”
Where to Begin
To begin establishing that system now, Hupfer encouraged CUs to draft the policies and procedures that will serve as the backbone for the compliance management system.
“There are essentially four components examiners want to see. First, the compliance program itself. Second, a well thought-out and regular audit function. Third, board and management oversight of the system. Fourth, a policy for timely responses to consumer complaints.”
Once these policies and procedures are drafted, Hupfer recommended setting a plan for staff training—which team members and how often they’ll be trained. The content of that training will change over time as regulations and the credit union’s profile evolve, he said.
Hupfer said PolicyWorks is helping credit unions develop compliance management systems.
“Often, they want assistance with either the auditing of their compliance program—which we can provide—or assistance creating the program itself,” he said. “As part of their compliance program, PolicyWorks can help credit unions ensure they are having regular, periodic review of all their deposit and lending operations to ensure compliance.”
Monthly Reviews
Through a partnership with ComplySight and its online compliance management software, PolicyWorks performs monthly reviews of various aspects of the credit union’s operations—and uploads findings online into the ComplySight software.
“So the CEO and senior management can get a dashboard view of where their compliance gaps may be,” said Hupfer. “And, we’ll work to resolve any gaps found.”