OLYMPIA, Wash. (9/18/13)--Washington credit unions with assets of more than $500 million must take enhanced compliance examinations, which were effective Sept. 11, said the Washington Department of Financial Institutions (DFI) Division of Credit Unions (DCU).
For credit unions with less than $500 million in total assets, DCU said it will continue to monitor compliance as part of the safety and soundness examination.
"The DFI has been working on this for the past couple of years," John Trull, director of regulatory affairs for the Northwest Credit Union Association, told News Now
. "The association has supported the delays so that the launch of the program goes as well as possible and that the process is in the best interests of everyone--our credit unions and regulators alike. We will be getting feedback from our members following compliance exams."
The enhanced program is:
Focused solely on consumer and regulatory compliance,
Conducted at a different time than the annual safety and soundness exams, and
Completed with a compliance rating and report issued to the credit union.
For the program, DCU said it plans to complete the separate compliance examinations of those credit unions with assets of more than $500 million during the next 20 months. It will continue future separate compliance examinations of the largest credit unions on roughly a 20-month cycle. The new program should result in a more effective consumer compliance examination process, DCU said.
A pre-examination letter will be sent to the credit union about eight weeks before the examination. The letter will describe the examination scope in detail and provide a list of information/documentation to be prepared in advance of the examination.
The examination scope will cover operational functional areas such as deposits, consumer lending, mortgage lending, mortgage servicing, privacy and consumer information, and/or cover several regulations.
The examiner-in-charge (EIC) for the compliance examination will contact a credit union representative to obtain the pre-exam information. During the examination, the EIC may meet with the manager and staff, the board chair and the supervisory committee. The EIC will arrange a date and time with management for the exit conference. A separate examination report will be issued about 30 days after the exit conference.
Significant concerns found during the consumer compliance examination will be followed-up by examiners during safety and soundness exams or a special limited scope compliance exam, DCU said.