June 28, 2012

Credit Union Management magazine’s Web-only “On Compliance” column runs the fourth Thursday of the month.

As LEVERAGE, the LSCU Service Corporation, researched how to bring compliance value to credit unions of various asset sizes, it heard repeatedly how credit unions struggle to manage, organize, identify, interpret, and implement new and changing regulations. Every credit union wants to do these things right the first time to reduce unnecessary expenses and risk, while still providing excellent service to their members.

When credit unions were asked what would help them most with their compliance challenges, most responded that they could use assistance and guidance on becoming compliant and staying up-to-date thereafter.

This feedback has supported the choices LEVERAGE has made in offering its ComplyTrac automated compliance system.

Onboarding and Beyond

Many times, ComplyTrac helps credit unions automate what was previously a manual process. To do this, ComplyTrac experts first help client CUs research applicable regulations and map them to the CU’s current compliance status, preparing a summary action report for the credit union’s approval.

If a CU decides to go forward, the next step is onboarding, the process of gathering, analyzing and reconciling the credit union’s data, made up mostly of policies, and uploading it into the automated compliance system. The concept of onboarding a credit union’s specific policies and mapping them to regulatory citations is what sets automated compliance apart from other methods of managing regulatory requirements.

Once ComplyTrac is in place, the automated system sends the CU’s compliance staffer a secure email about taking action when any change to the current regulatory environment affects the CU. Notably, the system can be programmed to only send updates on regulations by which the CU is actually affected, based on its asset size and other characteristics. The CU’s compliance staffer can make a digital record in the system of all actions taken in response, which makes reporting easy.

“We were looking for a compliance solution that would keep us up-to-date on changes to existing regulations as well as newly released ones,” said CUES member Charles Faulkner, CEO of $66 million Jefferson Credit Union, Birmingham, Ala. “We chose ComplyTrac because it is designed to accomplish this goal for us and help us to act on only those changes that affect our specific policies and procedures.”

On a day-to-day basis, a CU’s compliance staffer also can look up regulation information in ComplyTrac, which provides quick links to actual regulations on websites of such regulators as the National Credit Union Administration and the Federal Register. (It doesn’t include state rules at this time.) In addition, the CU can ask questions of the ComplyTrac expert assigned to the institution.

A quarterly and annual action plan also is delivered for approval to credit unions using ComplyTrac.

Florida A&M University Federal Credit Union found that ComplyTrac would save staff time and keep the CU up to date much better than its manual system had.

“We decided to utilize LEVERAGE’s ComplyTrac for several reasons,” says Clarence Rivers, CEO of $22 million Florida A&M University FCU, Tallahassee. “First, the automated compliance solution provides our credit union with easy access to the latest regulatory changes, and allows our staff to promptly initiate the required changes in policy for review and approval by our board of directors in a timely manner. This allows our credit union to be more cost effective and in compliance.

“Second, ComplyTrac allows us to be more diligent in addressing policies, and meet the deadlines required from regulatory agencies, allowing our staff to be more up-to-date and knowledgeable on changes,” says Rivers.

Regulators have commented on how written and up-to-date policies and procedures are an integral component of a strong compliance program. Setting aside capital or allocating resources for an automated compliance solution can help a credit union stay current and—in the end—put more resources into serving members and growing revenues.

Rosanna Jacobsen, CUCE, is director of compliance solutions for LEVERAGE, the LSCU Service Corporation. LEVERAGE is a business services provider that has a revolutionary ePurchasing platform and a contract management system in Ventelligence, in addition to automated compliance execution powered by ComplyTrac; and many other solutions. Visit myleverage.com to learn more about how credit unions have leverage in the marketplace. You can follow LEVERAGE on Twitter or LinkedIn.