Efficient Compliance Staffing as the Pandemic Plays Out

Getting the most compliance value for the least cost will be even more critical than usual as credit unions head into a time that’s likely to feature reduced revenue. How will they do this? 

Specialized, technical expertise is essential. $1.8 billion America’s First Credit Union, Birmingham, Alabama, gets the expertise it needs from a staff of 10 people who undertake legal, risk and nuts-and-bolts compliance activity, says CUES member Alan Stabler, CCD, EVP/CAO/general counsel. The group of 10 includes three people devoted to Bank Secrecy Act compliance. 

“Compliance has always been important,” he notes, “but the passage of Dodd-Frank and the Patriot Act and the advent of the Consumer Protection Financial Bureau made it essential to have a dedicated compliance staff. In addition to regulators, class-action lawsuits are always a risk.” 

$2.5 billion GTE Financial, Tampa, Florida, has an internal regulatory compliance council comprised of the leaders of the business units that deal primarily with CU operations, explains CUES member Marie Campbell, CSE, in-house counsel. The council discusses new and impending legislation that will impact the organization. 

“The council plans for the impact of new laws and regulations and how to absorb and implement changes,” she says. “It involves educating and training staff on the rules, providing guidance and confidence that the credit union as a whole will act and perform knowledgeably. This council and our compliance program help the credit union to move faster and with confidence in preparing for regulatory changes and examinations.” 

In the same vein, $5 billion ConnectFirst Credit Union, Calgary, Alberta, fields a team of seven people who deal with regulatory compliance and fraud, explains CUES member Dale Scott, CCE, director/risk services. They are primarily generalists, most with front-line experience, who follow all the regulations. 

Compliance justifies a full-time specialist, says Marcus King, VP/audit and compliance for the Credit Union Audit and Compliance Group, Birmingham, Alabama, but many small CUs—most of those under $100 million in assets—can’t afford even one dedicated compliance professional, so the responsibility falls on the executives to juggle with all their other responsibilities. 

He could be describing $66 million Community Choice Credit Union, Commerce City, Colorado. It can’t afford a dedicated compliance staff or officer, but the work still has to be done, explains CEO Rainy Thoen, CPA. The answer is outsourcing and two officers who add this to their regular duties, she reports. 

Community Choice CU uses Mountain West Credit Union Association for compliance reviews and executive summaries. The CU also uses hosted software from AffirmX and features of its Prodigy core system for BSA transaction screening and suspicious transaction identification.

It’s not easy and takes more than an hour a day, Thoen says. Neither the regulators nor the fraudsters give her CU a pass because it’s small. But their efforts are working. 

“We spotted a large check being deposited into a member account, investigated, determined that it was fraudulent and canceled the deposit before the funds could be withdrawn,” she reports. “We protected the credit union and spared the member some trouble because he happened to be getting ready to buy a dozen gift cards.

An experienced compliance officer “knows a little bit about a lot of activities,” King notes. To make the position productive, a CU needs to invest in keeping the person up to speed by supporting conference attendance and subscribing to compliance aids, he adds.

One of the best tools for streamlining compliance, Stabler says, has been e-signatures. “Now that they are widely accepted, we can eliminate the need to mail, fax or email documents. That was a lifesaver during the restrictions of the COVID-19 environment. It enabled us to execute compliant documents in minutes.” cues icon 

Richard H. Gamble writes from Grand Junction, Colorado.