NEW HAVEN, Conn.-Credit unions may have a tax exemption, but they're anything but exempt from the "compliance tax," according to one company.

Indeed, in the inverse of typical tax rates, the smaller the CU the larger the compliance tax burden in most cases, reports Continuity Control, a provider of an on-demand, web-based software platform for compliance.

"We're seeing this dramatic increase in back-end costs to support every dollar of assets," said CEO Andy Greenawalt, referring to what the company calls the "compliance tax." He cited research by Gartner that shows "institutions under $100 million in assets do not have the ability to support compliance. But we challenge the assumptions related to the cost."

For credit unions, Continuity Control offers what might be considered a compliance tax "exemption" in the form of a software platform it calls "Control" that offers various "apps." The apps seek to break down various compliance requirements into a series of simple, automated steps that meet all reporting requirements. The apps are created by experts and organizations specializing in certain compliance verticals. Credit unions can also earn income by creating and selling an app.

Continuity Control is also now seeking to leverage crowdsourcing via an online collaboration platform called Control Community, a forum for banks, CUs and vendors to work together cooperatively on certain issues.

"The way to handle these costs is with shared sourcing," explained Greenawalt. "With our platform we are able to take every $1 (in compliance costs) down to as little as 16 cents. We look at everything that goes into the cost of compliance. It's death by a thousand cuts."

Greenawalt likened Continuity Control's solution to how video games at one point retailed for $40, for instance, butnow can be had for 99 cents via Apple's iStore. "The model is one of distributing costs," said Greenawalt. "We have a store full of apps. It's easy to get more and it's cost-effective."

Those apps, noted Mickey Goldwasser, SVP-marketing, provide CU execs with to-do lists and step-by-step compliance processes that require no training and which are easy to monitor. All apps are automatically updated and include built-in "nagware" for jobs not being done.

"We don't believe that there should just be two options: merge or die," said Goldwasser of smaller credit unions facing enormous compliance challenges.

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