Compliance officers and others responsible for their credit union’s compliance program should be sure to place particular focus on three key areas in 2014.
1. Enterprise Risk – NCUA and the other federal regulators have said repeatedly that credit unions need to be sure they understand the risks involved in their operations and in the products and services they offer. Be sure that your credit union has evaluated and documented it’s risk in the following areas: transaction risk, strategic risk, liquidity risk, compliance risk, interest rate risk, credit risk, and reputation risk. In addition, you need to perform periodic risk assessments in a number of specific areas, such BSA, OFAC, IT security, loan participations, etc. Lastly, be sure that the credit union has documented risk assessments for higher risk products and services, such as indirect lending and outsourced relationships.
2. Mortgage Lending – There is an avalanche of new mortgage regulations taking effect in 2014, that address mortgage disclosures, mortgage originator compensation, appraisals and mortgage servicing. The CFPB has free compliance tools on its website, including guides and checklists, to assist you with implementing the changes. However, you will need to ensure that once the changes are implemented they are being complied with on a day-to-day basis. This will mean either expanding the scope of your internal compliance or internal audit reviews or having a vendor, like AffirmX, review and monitor your mortgage lending compliance throughout the year.
3. Fair Lending and HMDA Data Collection – Fair Lending is also on the radar screen of NCUA and the other federal regulators. Be sure that you have performed a recent fair lending risk assessment and that you have analyzed your HMDA data in order to understand where your credit union may have vulnerabilities. Credit unions identified as “HMDA outliers” are very likely to be targeted for fair lending exams. AffirmX has easy-to-use and inexpensive tools to help you understand your HMDA data and how it compares to the data of other lenders in your geographic market, as well as, other facets of your market penetration.
