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Compliance collaboration hot topics at small CU roundtable
WASHINGTON (2/28/11)--Collaboration and compliance were among the hot topics addressed during the first-ever, half-day Small Credit Union Roundtable at the Credit Union National Association’s (CUNA) 2011 Governmental Affairs Conference (GAC) in Washington, D.C., which kicked off Sunday. The conference runs through Wednesday. The small credit union session included three roundtables panels. CUNA President/CEO Bill Cheney also addressed the group. Cheney explained that CUNA’s role is to create a better environment for credit unions to operate within, but, he underscored, the association’s strength ultimately lies with its members. As evidence, he cited the list of Congress members slated to speak at this week’s GAC, an indication that credit unions had represented themselves well with both consumers and in Washington during the recent financial crisis. “I can’t tell you how far you’ve come and distinguished yourselves in a short amount of time,” Cheney said. “Congress has taken notice.” Regarding collaboration, George Hofheimer, chief research officer at the Filene Research Institute, said during the roundtable discussions that it makes sense for small credit unions because scale matters in financial services. “It’s very simple: The higher your volume, the lower your costs,” Hofheimer said. Credit unions have a common value--lowering costs to serve their members better--to rally around, Hofheimer said. The question for credit unions is how to collaborate. The problems are human as much as tactical. Hofheimer cited trust, vision and conflict as issues that all collaborative efforts must proactively address. “I find that when it comes to collaboration you have to give a little to get a lot,” said roundtable participant Frank Michael, CEO of Allied CU Stockton, Calif. “I think we need to think in terms of giving up control for something that is beneficial to every one of us.” One of the areas credit unions have begun to collaborate is compliance. Roundtable participant Veronica Madsen, director of compliance and general counsel for the Michigan Credit Union League (MCUL), discussed how league dues helps the MCUL field two compliance officers that help credit unions throughout the state. Madsen said the compliance officers are “booked solid” throughout the year. “They enable people who were many hats to remove one of those hats once in a while,” Madsen said. Another resource is League InfoSight, an online compliance resource created by the Florida, Georgia, Michigan, Ohio and Texas Credit Union leagues in 2003. Since its development, InfoSight has established partnerships with CUNA's compliance staff and expanded, and now also provides compliance service to 31 states. Roundtable participant Lucy Ito, senior vice president of credit union growth/development at the California and Nevada Credit Union League, said she encourages members of her league to use it because those who do access it on average more than 100 times a year. Also, Jon Hernandez, president/CEO of Mattel FCU, El Segundo, Calif., shared a story of why collaboration is a good fit for the credit union model. While vacationing in Hawaii, Hernandez was waiting in a long line for a rental car at the airport, when he noticed that an employee from a competing rental car company helped out the rental car company where he was standing in line. When Hernandez asked her why she would help out a competitor, the agent responded, “In Hawaii we just want to be sure the people that come here are being served. We want them to feel good about coming to Hawaii.” “Collaboration isn’t just about driving down your prices; it’s about offering your members ervices you couldn’t otherwise offer them,” Hernandez said. The three panels and participants included:
* Collaboration: Hofheimer, Ito, and Jamie Chase, principal and institgator of goodness at CU Strategic Planning; * Regulatory Compliance: Madsen; Joetta Heck, credit union compliance expert and CEO, Kemba Charleston FCU, Charleston, W. Va.; and Kathy Thompson, CUNA senior vice president and associate counsel for compliance and legislative analysis; and * Open Forum: Michael; Bob Hoel, senior scholar Filene Research Institute and professor emeritus of business and Colorado State University; and Jennifer Simmons, interim CEO/chief member officer, Maryland and District of Columbia Credit Union Association.
News Now will provide further coverage of the small credit union issues later this week.
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