One credit union industry insider has two more compliance issues high on her radar right now: overdraft practices and the Bank Security Act.
"Every time I turn around there is something else relating to overdraft and BSA," said Gaye DeCesare, president and CEO of Compliance Assistance for Credit Unions. "They keep popping up and they have the biggest fines attached to them." (COMPASS 4 CUs is a wholly owned subsidiary of $327 million-asset Belvoir Credit Union of Woodbridge, Va.).
The Bank Secrecy Act, has been around since the 1970s, originally aimed at money laundering and drug trafficking, DeCesare noted. After 9/11 it was "beefed up" to spot terrorist activity.
"The law has not changed significantly since 2002, we are not getting new requirements, but people keep messing up," she said.
Part of the problem: Regulators seem to be "never satisfied" with the way credit unions attempt to comply. DeCesare said BSA is one of four required elements examiners have to look at each time they do an exam.
"It is interesting to me that credit unions, and banks, seem to be unable to get it down," she said. "It has to be top of mind all the time for compliance officers. We saw BSA in the news this week with the case of [former Speaker of the House of Representatives] Dennis Hastert. It shows what we do is justified."
As for overdraft, DeCesare noted the CFPB fined a bank in Alabama $7.5 million for its practices, but said any new rules are still in the works.
"There are several large class action lawsuits on overdraft practices in California, in part because there is no regulation clearly defining what can and cannot be done," she said. "The policy in question relates to available balance versus actual balance, usually related to holds that have been placed. The suits allege banks and credit unions are not explaining the difference between available balance and actual balance, so we are telling clients their disclosures need to be clear."