Compliance

Interchange Proposal Tops Regulatory Priorities

CUNA outlines top issues on the regulatory docket.

February 03, 2011
KEYWORDS banking , board , interchange , ncua
/ PRINT / ShareShare / Text Size +

Financial literacy for directors

An NCUA Letter to Credit Unions is scheduled to be released soon by the agency on the financial literacy requirements of federal credit union (FCU) directors.

The NCUA Board approved a final rule at its December meeting that prescribes certain requirements for FCU directors, including requirements on financial literacy. CUNA urged NCUA to clarify the rule.

The agency intends for the letter to clarify the financial literacy requirements, which become effective July 2011, six months after publication of the final rule in the Federal Register.

The letter provides guidance on the following “base financial literacy requirements”:
1. Financial statements. A director should know what each line item means and its potential effect on the FCU;
2. Various risks to the FCU, such as credit, transactional, and reputational risks; and
3. Internal control mechanisms to control such risks.

NCUA’s Office of Small Credit Union Initiatives will offer free training workshops across the country and will make a training DVD available in May.

The level of necessary financial literacy depends on the size and complexity of the FCU.

Corporate CU guidance

NCUA issued a Corporate Credit Union Guidance Letter (No. 2011-01) regarding permissible activities for corporate credit union service organizations (CUSOs).

The letter addresses how corporate CUSOs may submit requests to NCUA for authorization of nonpreapproved business activities. Starting April 18, 2011, preapproved corporate CUSO business activities will generally be limited to brokerage and investment advisory services, plus other business activities the agency chooses to approve pursuant to a corporate CUSO’s request or the agency’s own initiative.

Letter No. 2011-01 follows an earlier Letter to Corporate Credit Unions (No. 2010-02) issued in December concerning corporate credit union compliance with NCUA’s revised corporate regulations. This letter also addressed corporate CUSOs to some degree.

In addition, Letter No. 2010-02 addressed corporate credit union capital, treatment of legacy assets held by corporates not in conservatorship or liquidation, net economic value standards, and corporate credit union chartering and mergers.

Internet banking authentication

CUNA expects further guidance from NCUA and the Federal Financial Institutions Examination Council (FFIEC) regarding authentication on internet and mobile transactions.

This guidance will update the FFIEC’s 2005 guidelines on internet banking authentication, which included authentication methods, risk assessment, and customer verification and awareness.

In addition, NCUA has indicated it will update its examination procedures on internet and mobile transaction risks later this year.

Post a comment to this story

heroes

What's Popular

Popular Stories

Recent Discussion

Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

Your Say: Who should be Credit Union Magazine's 2014 CU Hero of the Year?

View Results Poll Archive