Regulatory Compliance
THE WORKS BlogCredit Union Compliance News & Views

Could a Compliance Committee benefit your Credit Union?

Depending upon the size and complexity of your credit union, a Compliance Committee can be a great asset for your compliance program.  The committee should be made up of individuals from each area of your organization (lending, deposits, operations, etc), and meetings could occur monthly or quarterly depending upon the effectiveness of the compliance program and/or changes in the regulatory environment.

I generally see compliance committee meetings separated into multiple parts.

First, is a review of any internal or external audits completed since the prior meeting.  Deficiencies should be noted and members of the committee should be assigned responsibility to address each issue.  A due date should be established, and the member should provide a status report at each meeting, until the issue has been resolved.

Next, is a discussion of new items.  This is a good opportunity to discuss any proposed or final rules for which the credit union must comply, or any new products the credit union may wish to implement.  Because various areas of the credit unions operations are present, this is a good time for the committee to discuss any issues which may arise within each operational area.  The group can determine the issues which may need to be addressed, assign responsibility to the appropriate party, and establish a time frame for each action to be completed.

The third part of the meeting may be dedicated to training.  This is a chance for the compliance officer to provide training to the committee, or for other members to provide training on compliance concerns within their particular area of the credit union.   Members of the committee should then share this knowledge with staff in their particular area of the credit union.

A final area which may be included is Policies and Procedures.  The committee may review the credit union’s policies and procedures to determine that they are still appropriate in scope and effectiveness.  If changes are warranted, the committee may make suggestions.  Once approved by the committee, updated procedures may be shared with the staff, and policies may be presented to the board for approval.

Minutes of the compliance committee should be maintained and provided to the board at each meeting.  This may help to keep the board abreast of the effectiveness of the credit union’s compliance program.

As I mentioned, the size and complexity of the credit union will have a significant impact on the need for, or effectiveness of a compliance committee.  Larger credit unions are likely to receive the most benefit as they may have larger departments and less daily communication with other areas of the credit union.  However, smaller single-branch credit unions may still receive the benefit of setting aside a specified time to discuss the credit union’s compliance efforts, review regulatory changes, and create reports for the board to review.

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