Compliance: Three questions CEOs should ask staff
WASHINGTON (3/9/12)--The Credit Union National Association's (CUNA) Comp Blog
has released its latest compliance wrap-up, a monthly CompBlog
feature that, in part, suggests important questions that credit union CEOs should be asking members of their staff.
That CEOs ask whether their credit union is filing currency transaction reports (CTR) and suspicious activity reports (SAR) electronically. CUNA's Comp Blog noted that the Financial Crimes Enforcement Network--or FinCEN--will require all CTR and SAR reports to be filed electronically, starting on July 1. It will grant temporary hardship extentions to some small credit unions, like those without internet access. Credit unions should decidesoon whether this temporary compliance extension to March 31, 2013 is worth applying for. Another option is spending the next four months getting the needed technology in place to comply with the CTR and SAR Filing requirements, CUNA said.
CEOs whose credit unions offer home equity lines of credit and second mortgages should ask if their credit union will be prepared to show that they have conducted an acceptable assessment of probable allowances for loan and lease losses (ALLL) for mortgage loans, especially where the credit union does not hold the first mortgage. CompBlog noted that the National Credit Union Administration and other federal financial regulatory agencies earlier this year issued supervisory guidance on ALLL estimation practices associated with loans and lines of credit secured by junior liens on one- to four-family residential properties. The guidance addresses the responsibilities of financial institution management and examiners and builds on existing supervisory guidance for home equity lending and the allowance for loan and lease losses. Credit unions should expect increased examiner focus on this issue during this exam cycle as a result, CUNA's compliance wrap-up said.
That CEOs ask if their credit union can effectively defend their overdraft protection programs. Regulatory scrutiny of overdraft programs may also soon increase, CUNA said, noting that the CFPB is now asking hard questions about whether consumers are being informed of alternatives, whether the institution is manipulating the order transactions are processed, how dependent the institution is on overdraft fee income, and whether certain groups are incurring most of the overdraft costs. The CFPB is accepting comment until April 30. CUNA will also soon release a comment call and a survey on the CFPB's overdraft questions.
The monthly wrap-up also features information on upcoming compliance events, training sessions, and effective dates. For more of CUNA Comp Blog
's monthly wrap up, and other compliance gems, use the resource links.