Compliance Officer Talks Current Events

Rocky Mountain Credit Union's Holly Lane discusses how she manages today's complicated regulatory environment.

Holly Lane is a compliance officer with Rocky Mountain Credit Union ($131.1M, Helena, MT).

How big of a priority is compliance at Rocky Mountain Credit Union?

Holly Lane: Very. Compliance is an everyday part of our existence. We are constantly training staff, reading material to keep up on changes, and consulting with our peers and other resources to make sure we stay on top of the constant changes.

Compliance is a huge part of our budget as it affects so many areas of the credit union. A few of the areas are: training (off-site locations requiring travel), in-house training, online training requiring the purchase of a third-party vendor and maintaining that contract, exam and audit fee.

We’re mainly focused now on anything dealing with our exams, risk assessment, credit risk, policy revision, and procedural practices. Another area we’re constantly focusing on is the security of member information.

Do you rely on outside help, like from a CUSO or other firm, to help ensure you meet compliance standards?

HL: Not in a formal, contractual way. We use all the resources at our disposal, and rely on any third-party providers of services to maintain their own compliance standards. An example would be our loan and operations documents. We rely on our vendor to work with us to update our documents based on changes in the regulatory environment.

Could you describe your job focus, duties, and priorities? What are specific challenges for you?

HL: My job focus in relationship to compliance is to manage risk on the deposit side.; Examiners look for methods of assessing risk on accounts and my duties include monitoring reports, accou training on compliance related matters. My priorities include keeping up with regulatory changes, implementing them in a timely manner and keeping staff informed. It’s also very important that proper monitoring and reporting of compliance-related matters is done on a consistent basis. This is a major priority for us.

One specific challenge is consistently applying enhanced due diligence practices to assess risk on accounts. While our data processing system gives some relief in the way of reports and gathering information, it also takes us a lot of manual work to monitor accounts. I’m in the process of using all the available tools provided by our data processor to make this process is as easy as possible. But I have a feeling we’ll need to purchase an enhancement to our current system to help. This will costs thousands of dollars, but it will be inevitable.

What do you expect from the Consumer Financial Protection Bureau?

HL: We expect a simplicity of disclosures to benefit consumers, but to add regulatory burden for us. It’s understandable that consumers need to make informed decisions about important financial matters, but it’s unfortunate another regulatory body had to be created to monitor regulations already in place.

The additional burden will be conforming to new standards of disclosures that will require us to work with our vendors to update existing documents and may require additional training for staff. We are preparing for this by reading material related to the changes and participating in webinars or other education offerings, when possible. We continue to rely on our state league and our vendors to keep us up-to-date with the possible changes.

How has Rocky Mountain Credit Union been addressing the ATM disclosure requirements?

HL: We replaced our old ATMs to conform to the new standards and we monitor each ATM on a continual basis to make sure no tampering occurs. We were in need of updating our ATMs at the time, so the additional expense was warranted.

Please share your thoughts on these issues. How do they affect Rocky Mountain Credit Union?

HL, Reg. E: Restricting the ability to overdraw a member’s account without their consent is a prudent measure. Making sure account holders are educated and informed about their choices is not only good for them, but benefits the credit union as well. Other areas the CFPB will or has already addressed should benefit members. We continue to look at our Overdraft Protection program as a resource for members and counsel them on the benefits. When this service is used responsibly, it saves members time, money, and embarrassment.

HL, Bank Secrecy Act: BSA requirements are an integral part of the day-to-day activities of the credit union and for good reason. The value of knowing our members and assessing their accounts on a continual basis can be burdensome, but is important for the protection of our members and the credit union.

HL, Mortgage Servicing Requirements: Regulations will continue to evolve due to many factors and we will continue to operate in this area with the utmost prudence. Although the changes greatly impact our credit union, we understand the importance of clarity for our membership.

What do you expect to be challenges in credit union compliance in the year ahead?

HL: We’re anticipating writing or re-writing policies and procedures affecting member business loans, participations, secondary market real estate, troubled debt restructuring, interest rate risk, enhanced due diligence in Bank Secrecy Act monitoring and reporting. That’s just to name a few!

What is your advice for credit unions wanting to improve their compliance efforts?

HL: Include in your budget funds to train your executive management and compliance staff on an annual basis. Make sure you are diligent with your vendors about keeping up with compliance changes to make lighter work of your efforts. Work with your data processor to enhance your system to help with all your compliance efforts. Use your state league whenever possible and look for additional resources that you or your management staff can review on a consistent basis. Look at your audits and exams as a chance to learn and improve your compliance efforts.

Compliance is a many-faceted area. Without the knowledge and expertise of others on staff contributing to the effort, it can be very overwhelming. Get training and use your resources.

HollyLane_RockyMountainCUHolly Lane is a compliance officer with Rocky Mountain Credit Union ($131.1M, Helena, MT).

May 28, 2014

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