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The Website Compliance Review – Still Important
Friday, March 11, 2016 6:35 AM


By Steve Gibbs, CUCE, BSACS, AVP Shared Compliance, Credit Union Resources

In recent years, regulatory requirements such as the Bank Secrecy Act and FACTA Identity Theft Red Flags have diverted our attention from many other basic, and equally important, directives and regulations. In particular, the need to perform a periodic website compliance review has crept up on many institutions that, in many cases, have failed to schedule the review and were summarily criticized by regulatory authorities. Is there something deeper here than just the regulations and directives? Why is it important to have a website compliance review performed?


It's no secret that the United States is probably the most lawsuit-prone nation in the world. Litigation is filed for any number of things as diverse as overly hot coffee to advertising practices. With advertising in mind, let’s look at our website. 

Should we think about our website as advertising? You bet! It’s one of the most effective means of advertising in this modern market. It also opens up our websites to the world and to billions of individuals who may find fault with elements of the site. Mistakes or omissions in copy can subject us to lawsuits for discrimination (Regulation B), fraud/deceptive advertising (Regulation AA), and child endangerment (Children’s Online Privacy Protection Act, or COPPA). 

In addition, the Internet not only opens us up to single lawsuits, but class action litigation that can involve tens to thousands and even (in some cases) millions of persons. Just a small class action suit could devastate the reserves and earnings of a moderate to larger-sized institution, bank, or credit union. Even in situations where the class action fails, the credit union could still be left with overwhelming legal obligations and court costs. Many times, these pitfalls will be caught in the website review and resolved before any legal repercussions occur.

We have to remember that no matter how good our intentions may be and what the truth really is, we can fall victim to perceptions that result from negative circumstances in which our institution’s name is associated. This is particularly true when we speak of our Internet presence through the website. Complaints from failure to properly disclose loan or savings rates, regulatory violations (Regulation B or COPPA), or even hackers entering the site and manipulating information that might be misleading, objectionable, or cause members to be defrauded can prove detrimental to a good public image. An effective website compliance review will determine elements of importance that might negatively affect the operation of an institution’s website, and then resolve to reinforce and protect those elements.

As we’ve already asked, what is our website if not advertising? The credit union can really put its best foot forward with a well laid-out, monitored, and consistently updated website. Good compliance practices can even bolster the marketing effort, such as advertising that we are “an equal opportunity lender or employer.” In addition, items such as “…in compliance with the USA PATRIOT Act, we check the identity of all membership applicants,” project a level of patriotism. These items are reviewed closely within the scope of an effective website compliance review.

Most of all, management may be judged by the program presented on its website. The website and printed and posted materials are a public face to the credit union, and management must take responsibility for what is reflected. Given the avalanche of recent regulations and directives, management’s attention has become increasingly more divided with regard to these issues. An effective website review keeps management, as well as other officers and directors, informed of any crucial changes or additions that the website may require.