Risk Management & Compliance Services offers individual, comprehensive risk assessments

Credit Union Resources’ Shared Compliance Resources has expanded to become Risk Management & Compliance Services. As part of this process, the department is developing and refining its service offerings, and employees are obtaining risk management designations to provide additional expertise to clients.

Individual risk assessments

Risk Management and Compliance Services performs individual risk assessments for credit union clients, addressing:

• Bank Secrecy Act/Customer Identification Program/Office of Foreign Assets Control;
• Concentration risk;
• Fair Lending; and
• Fair and Accurate Credit Transactions Act red flag identity theft.

Enterprise risk management

A comprehensive review of credit union risk, known as Enterprise Risk Management, assesses the overall risk across the credit union and its operations. Previously, Risk Management & Compliance Services performed these assessments manually, and now they offer a fully automated program.

“The recently completed ERM was a good starting point to get some exposure using the new technology as well as getting experience with various areas of risk management,” said Steve Gibbs, Risk Management & Compliance AVP. “While using a third-party technology platform, our team has built an extensive electronic ERM program, which will provide ongoing efficiencies and a repository of the analysis for comparison basis. The primary point of this comprehensive analysis is assessing risk in various areas and providing senior management with a clear understanding and prioritization of those identified risks.”

NCUA and regulators

There is a huge gap in credit unions between obtaining the occasional audit and evaluating the credit union’s risk areas. Additionally, the National Credit Union Administration created a regulatory need by communicating to credit unions that their examination platform is moving to a risk-based format. In 2013, NCUA Rule 704.21 required corporate credit unions to develop policies and a program to evaluate and perform risk management. Natural-person credit unions, those that offer memberships through workplaces, churches, schools, or communities, will probably be mandated to perform risk management assessments as they grow or as risks and fraud become more prevalent. Risk management is now a requirement of banks by regulators, and credit union regulators will eventually call for this type of "safety and soundness" practice.

Our services

Risk Management & Compliance Services is poised to evaluate individual areas of risk in a credit union or a more comprehensive approach to risk areas. Our team has partnered with a software vendor and developed a comprehensive online risk assessment program to address specific areas of credit union operations prone to risk. Another option for credit unions is to allow our team to manage and monitor (after the evaluation phase) the risk areas selected by the credit union and providing services, creating mitigating enhancements, or providing a “trade-off” (insurance) to reduce risk. This portion of the service is ongoing and includes periodic evaluations and appropriate steps to reduce and manage the identified risks.

Our services initially target credit unions with $20 - $400 million in assets with a second tier for larger credit unions.

A template ERM proposal in in progress, as well as alternative services for specific risk management areas. To date, Risk Management & Compliance Services has performed more than 60 jobs, assessing parts of Enterprise Risk Management. When a credit union engages our team to manage the risk area, this will allow their staff members to focus on servicing their members, building member relations, and creating more revenue producing opportunities while trusting us to manage risk in their best interest.

For more information, contact Steve Gibbs at 800-442-5762, ext. 6637, 469-385-6637, or sgibbs@curesources.coop.

About Credit Union Resources Inc.
Credit Union Resources is a service corporation that provides industry-leading solutions and expertise to credit unions across the country. Credit Union Resources is a wholly owned subsidiary of the Cornerstone Credit Union League, a regional trade association representing the interests of credit unions in Arkansas, Oklahoma, and Texas.