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Compliance Proper policies procedures help CUs manage RDC risk

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WASHINGTON (9/14/09)--While extending remote deposit capture (RDC) to individual members can present some “operational and regulatory compliance risks,” the Credit Union National Association’s (CUNA) director of compliance information Valerie Moss writes that credit unions can address those risks by following “appropriate policies, procedures, and processes.” In the September issue of Credit Union Magazine, Moss said that credit unions that provide RDC, which allows credit union members to transmit scanned checks or share drafts to their credit union from remote locations, must do thorough due diligence on the third-party RDC vendor they enter into business with. The Federal Financial Institutions Examination Council (FFIEC) agencies, which includes the National Credit Union Administration, recommend that credit unions complete a “thorough risk assessment” and identify “the legal, regulatory compliance, reputation, and operational risks” related to the delivery system before they begin an RDC program, Moss added. Credit unions should also consider any legal and regulatory risks and should monitor RDC operations, safeguard account and personal information from their members, and be sure to comply with interagency internet authentication guidelines, Moss wrote. A full understanding of the operational risks related to the use of a RDC is also vital, and credit union managers must also have their credit union’s legal counsel review any contract that is entered into with an RDC service provider , she said. While the risks related to RDC are not substantively different from those related to any other financial transaction, altered checks or counterfeit funds may be harder to detect, Moss added. For the full story, use the resource link.

Inside Washington (09/11/2009)

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* WASHINGTON (9/14/09)--Government intervention in the financial crisis saved the economy, said Treasury Department officials Thursday at a hearing before the Troubled Asset Relief Program’s Congressional Oversight Panel (American Banker Sept. 11). Treasury Secretary Timothy Geithner said the programs that have been in place since the government bailed out the nation’s banks have stabilized the financial system. Many of the programs are winding down now, he added. Elizabeth Warren, the panel’s chair, said troubled assets are still a problem at small banks. The risk is unknown and unresolved, she said. Geithner also noted that he doesn’t want to give the impression the nation is not still facing economic challenges. However, he said the government would not repeat “classic errors” of economic policy.” His statements came after the Federal Deposit Insurance Corp. said it would end a program to guarantee bank debt Oct. 31. The Treasury’s guarantee program for money market mutual funds will end Friday ... * WASHINGTON (9/14/09)--The Federal Trade Commission has scheduled a two-day roundtable Sept. 29-30 to discuss consumer protection issues in litigation and arbitration proceedings to collect on consumer debt. The first day of discussion will cover the role of consumer choice, perceptions of bias, transparency of results, post-decision issues and future directions in arbitration of consumer debts. The second day will focus on consumer debt collection litigation proceedings ...

CUNA CEO search process begins

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WASHINGTON (9/14/09)--Credit Union National Association (CUNA) Chairman Kris Mecham Friday announced the formation of a search committee to begin the process of finding a successor to outgoing CUNA President/CEO Dan Mica. The action comes after Mica informed the CUNA board on Aug. 27 that he plans to step down in January 2011 after serving in the position for 13 years. “Dan Mica has been an outstanding leader for CUNA,” said Mecham, who is also CEO of Deseret First CU, Salt Lake City, Utah. “To say he leaves big shoes to fill would be a vast understatement. But the committee I am appointing today is up to the challenge of finding a successor who will build on Dan’s accomplishments and take CUNA to the next level.” The search committee consists of a chairman and four representatives from each of the four classes of CUNA directors: Class A (CUs with fewer than 20,000 members); Class B (20,000 to 73,999); Class C (74,000 and above) and Class D (state league presidents). Additionally there is one at-large member. Serving on the committee are:
* Harriet May, CEO, GECU, El Paso, Texas (chairman); * Patricia Wesenberg, CEO, Central City CU, Stevens Point, Wis. (Class A); * Eugene Foley, CEO, Harvard University Employees CU, Cambridge, Mass. (Class B); * Tom Dorety, CEO, Suncoast Schools FCU, Tampa, Fla. (Class C); * Brett Thompson, CEO, Wisconsin CU League (Class D); * Rudy Hanley, CEO, Schools First FCU, Santa Ana, Calif. (At-Large).
Also, Kris Mecham as CUNA chairman will serve ex officio on the committee; Dan Mica will also be an ex officio member and will serve as the committee’s liaison to CUNA management. “I have directed the search committee to begin its work immediately; its first task will be to select an executive search firm,” Mecham added.

New fair lending guidance may help CUs comply

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ALEXANDRIA, Va. (9/14/09)--National Credit Union Administration Chairman Deborah Matz on Friday encouraged credit unions to use recently updated interagency fair lending examination procedures to design “appropriate compliance programs” that will meet the standard of “all laws and regulations applicable to fair lending.” The regulatory alert, which is accompanied by updated interagency guidance that was first published in 2000, addresses some of the “risks and potential fair lending implications associated with using brokers or other third party entities for various aspects of lending operations.” The guidance also contains best practices for ensuring that lenders are not steering borrowers to higher priced loan products. According to the NCUA, the guidance, which was jointly issued by the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Office of Thrift Supervision, and the NCUA, also addresses practices aimed at detecting disparities in loan pricing. For the NCUA regulatory alert and the interagency guidance, use the resource link.