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Compliance Due diligence a must when working with NCUA
WASHINGTON (8/31/09)--Credit unions should take care to use the same due diligence when dealing with the National Credit Union Administration or other regulators that they take when dealing with everyday vendors, attorney Christopher Pippett advised in the August issue of Credit Union Magazine. To ward off potential letters of understanding and agreement (LUA) from regulators, Pippett advised that credit union officials should push back against regulators if they do not agree with a course of action or believe that they can meet a deadline imposed by a certain timetable. In the event that a LUA is issued, credit unions should seek legal advice before signing it, and should never simply sign a LUA when it is first presented by a regulatory examiner. Further, the attorney that is representing the credit union in the event of a LUA should be familiar with credit union law, Pippett said. While reviewing the LUA, credit unions should discuss reasonable alternatives that could address the examiners concerns and evaluate the prospective timeline for any recommended actions. Credit unions should also ensure that the document reflects steps that the credit union has taken to address the regulator’s concerns. The LUA should not be made public, and should contain a definite end date. Credit unions should also make sure to communicate with the regulator as the agreement is produced and should continue that sense of communication as the LUA is executed, Pippett added. For the full story, use the resource link.


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