CU*Answers Advisor

Regulation E and e-Statements

The CU*Answers mantra has always been “we make the tools, not the rules.” Regulation is always subject to interpretation and in some cases business risk. When we developed the e-Statement platform, credit unions requested we give them the ability to physically enroll members at the time of account opening. This request came from those credit unions that want and need to reduce statement cost and do it at the time the member is being sold credit union products.

The e-Statement Compliance Tax

E-Statements are a major cost-reduction service but are not a once-and-done type of offering. According to a recent article by attorney Brian Witt, this service comes with a compliance tax. This tax comes in the form of understanding and keeping abreast of a few regulations including Regulation E, Regulation Z, e-sign act, and TIS.

I have attached a copy of a recent web post related to auto enrolling members into e-statements without them giving the credit union an electronic affirmative consent. This document is written as if this attorney’s interpretation is correct and is intended to give guidance on the proper management of the e-statement services. Many CEOs that read this may become upset as this potential compliance risk has been weighed in the past and is now being challenged and publicized.

My only recommendation to those CEOs is to read on, speak with your own compliance attorney, and make sure you have a legal opinion on your process to justify your interpretation, if different from this one.

Say your practice is to enroll members by utilizing the opening workflow functions in CU*BASE in order to keep your e-statement penetration up. To manage this in accordance with the opinion listed above you would need to pull the e-Statement enrollment report (menu MNRPTE option #19) and on the drop-down select “1 Not accepted the Use Agreement” prior to the end of the month. The members listed on this report are those who you have physically enrolled but have not accepted the use agreement via It’s Me 247 online banking.

When you pull this report you do have the capability to export the file. Why? Perfect opportunity to use the Member Connect email option and send this group of members an email with a link to online banking reminding them to log on accept the agreement. You can also use Member Connect to populate a telemarketing group for outbound calls and call them directly.

Those who do not accept the agreement would need to be un-enrolled.

Projects on Tap at CU*Answers

To make the un-enrollment process even easier, our development team is working on specifications to add a new feature to CU*BASE that would help you un-enroll a batch of members from e-Statements according to your desired measurement (i.e., members who have not accepted the Use Agreement, or who have not logged on recently, or even those who have a bad email address). Watch for a special announcement and a new page on the Kitchen coming soon.

A final note on the author of the attached publication: Brian Witt is one of the best credit union compliance attorneys in the country and has worked closely with both CU*Answers and CU*NorthWest clients on issues related to compliance, loan forms, and working with regulatory bodies.Farleigh Wada Witt 3-4-11-Newsletter

FFIEC Supplement on Internet Banking Class 2

By Joe Spenski| Published on Dec 16, 2011

Thank you to everyone that attended our second webinar on the FFIEC Supplement to Authentication. As promised, here is a copy of the powerpoint used during the webinar.

FFIEC Supplement on Internet Banking CLASS 2 December 15

Posted in Audit Link Productions, FFIEC | Comments (0)

Sample It’s Me 247 Risk Assessments in Response to FFIEC

By Joe Spenski| Published on Dec 12, 2011

On Thursday, December 15, 2011, at 1:30 pm ET, CU*Answers will be hosting Part 2 of a webinar series intended to address guidelines of the FFIEC’s Supplement to Authentication. During this session Jim Vilker and Patrick Sickels will discuss the importance of performing a risk assessment on how your credit union uses It’s Me 247, along with other relevant topics. CU*Answers recently presented a preliminary webinar for a small credit union compliance group here in Grand Rapids, and have asked those credit unions to share a copy of their current It’s Me 247 risk assessment.

Sample It’s Me 247 Risk Assessment 01

If your credit union is willing to share your It’s Me 247 Risk Assessment, please send it to me at Jspenski@cuanswers.com. I will insert a link to your sample here on the Audit Link site. Be sure to let me know if you would like your name removed before posting.

Posted in FFIEC | Comments (4)

CU*Answers Introduces Network Compliance Teacher

By Jim Vilker, NCCO| Published on Nov 04, 2011

Audit Link, a division CU*Answers Management Services, has published its first addition of the Network Compliance Teacher. The magazine is a collaborative effort of CU*Answers and the compliance professionals of their credit union clients. Collectively they determine a theme, author the articles, and publish the magazine to all CU*Answers clients free of charge. “The articles in the Network Compliance Teacher revolve around regulations and how they impact staff at the operational level and they focus on the daily duties of credit union staff and how CU*BASE, the core data processing system, can be used to meet specific regulatory requirements” says Jim Vilker, VP of Professional Services. The publication is then professionally produced and distributed to all clients as well as published on the Audit Link Advisor Site. It can be used by any credit union in the country. Authorship is open to anyone utilizing the CU*BASE core system and believe it or not CU*Answers actually pays the credit union for their staff time to assist in the magazines production.

Posted in Press Releases | Tagged Audit Link, CU*Answers | Comments Off

FFIEC – Guidence & Supplement to Authentication in an Internet Banking environment

By Joe Spenski| Published on Nov 03, 2011

Thank you to everyone that attending the webinar yesterday! As promised, here is a copy of the presentation.

FFIEC Supplement on Internet Banking

Keep an look out for announcements on the upcoming webinar in December!

Posted in Audit Link Productions, Recent hotbuttons | Comments (0)

Introducing The Network Compliance Teacher Newsletter

By Jim Vilker, NCCO| Published on Oct 05, 2011

Audit Link is pleased to announce the Network Compliance Teacher Newsletter. The Network Compliance Teacher Newsletter is designed as a collaborative effort between Audit Link and the compliance professionals of our client credit unions, with an audience of every credit union staff member in our network who has to deal with the regulations affecting the credit union industry. Read More »

Posted in Audit Link Productions, Network Compliance Teacher | Tagged Audit Link, CU*Answers | Comments (0)

CU*Answers Provides Audit Link Update

By David Damstra| Published on Jul 26, 2011

Grand Rapids, MI “ July 26th, 2011
CU*Answers Management Services “ a subsidiary of CU*Answers, recently announced that since its Audit Link service started in mid-2008, its services to credit unions had expanded and has provided combined services to several dozen credit unions in the areas of audit and compliance.

The Audit Link team stated that its suite of services is designed to reduce the added work imposed by seemingly endless regulations and compliance issues facing credit unions today. Changing conditions and factors inherent in on-going regulation changes have mandated continuous training and frequent exposure to compliance considerations with applied auditor solutions. According to a representative, future forecasts continue to indicate an even greater focus upon these areas, with stringent penalties for violators. It said this has placed an even requirement of accountability upon a credit union staff to assure these regulatory requirements are being met.

Audit Link added that in addition to an initial credit union meeting for helping determine the status and level of service desired, its dedicated team provides each credit union with an Executive Summary stating the on-going auditing activities performed, and their outcomes. They stated they then provide written recommendations designed to improve internal credit union processes, on-going procedures and staff training.

Audit Link claims its prices charged for its service is a small fraction of what is traditionally seen in the credit union industry, and that most clients for which it performs services have saved many thousands of dollars as compared to alternative providers, updating internal credit union procedures performed and or performing daily monitoring/ reporting management services.

Posted in Press Releases | Tagged Audit Link, CU*Answers, Press Release Center | Comments Off

Adverse Action Notice

By Joe Spenski| Published on Jul 21, 2011

Thank you for everyone that attended the Adverse Action Notice webinar! There are several pieces of information relating to the webinar that we would like to post and make available to you. To make sure all of the related material stays in one place, we will continue to update this post when additional information becomes available.

-Adverse Action Notice – Reg B Webinar, July 21, 2011.

Adverse Action Notice – Reg B PDF

-Many of you were looking for the credit bureau risk scoring reasons. Wendy Gillies was nice enough to forward Audit Link a copy of her list. See the link below.

Credit Score Rating 2

*Updated July 22, 2011*

We made the following changes to the Adverse Action Notice based on your feedback from the webinar:

The verbiage “We are unable to offer credit for the reason shown under below…”. Removed “under”.
Added a line under the CRA for the credit union to enter a website.
Increased the field size for the applicant name.
Added an additional line for the member address.
Added a line for the CU website.

Adverse_Action_Notice_PDF

*Updated 8/26/11*

The Adverse Action OnDemand video

Posted in Audit Link Productions, Recent hotbuttons | Comments (1)

Risk Management Resource Site Boasts Successes

By David Damstra| Published on Jul 21, 2011

Grand Rapids, MI “ July 21st, 2011
CU*Answers recently announced that its RMRG site, or Risk Management Report Generator, has been well received since its launch late in 2009. Since its launch, 305 reports have been created online, 87 of them so far in 2011, while the Risk Management Matrix houses 33 matrices created by 55 different users.

According to the Grand Rapids-based CUSO of CU*BASE data processing and other services, the Risk Management Report Generator is a template designed to assist credit unions in completing the three phases (Risk Assessment & Planning, Due Diligence, Risk Management and Monitoring) of the evaluation process as related to their relationships with CU*Answers and other network partners. The Risk Management Matrix tool, launched in February of this year is designed to provide quantitative risk analysis for due diligence on new opportunities.

For more information on these tools or the other services provided by CU*Answers and network partners designed to assist credit unions with regulatory compliance, visit the Audit Link website at http://auditlink.cuanswers.com/

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Regulation CC changes

By Joe Spenski| Published on Jun 27, 2011

Effective July 21, 2011, section 1086 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amends the Expedited Funds Availability Act by increasing the amount from $100 to $200 that must be available for withdrawal by opening of business on the next day. Your credit union will need to review your disclosures relating to Reg. CC (especially those using model forms C-3, C-4, or C-5) and make sure you update them to read $200 instead of $100. Once the changes are made, credit unions are required to send existing members a notice no later than 30 days after the change has been implemented.

As of June 12, 2011 all online credit unions received the 11.2 release that included the Reg. CC changes.

Here is a section from the Federal Register:

IV. Dodd-Frank Act Amendments

A. EFA Act Dollar Amounts

Section 1086 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amends the EFA Act by increasing from $100 to $200 the amount of deposited funds that banks must make available for withdrawal by opening of business on the next day.30 The effective date of this provision of the act is the ‘‘designated transfer date,’’ which the Secretary of the Treasury has determined to be July 21, 2011.31 This provision of the EFA Act is implemented in § 229.10(c)(1)(vii). Additionally, the model disclosure forms set forth in current appendix C reflect the requirement that a bank must make $100 of the deposit available on the next business day. When the Dodd-Frank Act’s increase to $200 becomes effective, banks should ensure that their disclosures reflect the new funds availability schedule and that customers are notified of the changes in policy in accordance with § 229.18(e). Specifically, effective July 21, 2011, a bank basing its funds-availability disclosure on current model C–3, C–4, or C–5 must ensure that its disclosure indicates that the first $200 (rather than $100) of a check deposit will be available on the next business day after the day of deposit.32 Section 1086 amends the EFA Act to require the Board, jointly with the Bureau of Consumer Financial Protection (Bureau), to update the dollar amounts to reflect inflation every five years after December 31, 2011.33 These amounts include the amount of funds a depositary bank must make available from a deposit of a check not subject to next-day availability (§ 229.10(c)(1)(vii)), by cash or similar means (§ 229.12(b)), and under the new account and large-deposit exceptions (§§ 229.13(a) and (b)). These amounts also include the EFA Act’s damage limitations (§ 229.21(a)). To facilitate future amendments to the regulation in this regard, the proposed amendments minimize the number of references to specific dollar amounts. For example, in the future, the $100 (which increases to $200 as of the transfer date) mentioned above would be considered ‘‘the minimum amount of a deposit that must be made available on the next day.’’ The Board plans to seek comment on proposed methods of indexing the amounts to inflation jointly with the Bureau at a later date.

For a copy of the entire document, click here.

Posted in Best Practices, Upcoming regulations | Comments (0)

Are you monitoring your dormant accounts?

By Joe Spenski| Published on May 24, 2011

The Credit Union Times recently posted an article where an employee of a small California Credit Union embezzled $1.2 Million from dormant accounts. The former employee was able to transfer funds from dormant accounts to accounts that were controlled by her and her husband. This lead to the eventual closing of the Credit Union in 2007.

As part of the daily monitoring that Audit Link offers, here are a few suggestions that may help reduce or eliminate abuse of dormant accounts at your Credit Union:

Monitor dormant activity reports daily (PDRMTR report in CU*Spy).
Watch for large transaction, both deposit and withdrawals, to review for atypical activity.
Verify signatures to ensure the member was the actual patron.
Create a segregation of duties policy. You should not have individual performing transactions on dormant accounts also updating their dormant status.

For the full article, following the link below.

Prison Looms for Couple Accused of Embezzling From Small Credit Union

Posted in Best Practices, CU*BASE tool hints for compliance and auditing, From the desk of Joe Spenski | Comments (0)

Lender*VP Collections Roundtable Schedule

By David Damstra| Published on May 15, 2011

The Lender*VP team of CU*Answers has announced that it will be hosting a Collection Roundtable Event on Wednesday, May 25^th, from 9:30am “ 12:00 as well as again from 1:30 “ 4:30.

Held at the CU*Answers offices in Grand Rapids, Michigan, the Collections Roundtable is an open forum discussion on collections laws, internal procedures and CU*BASE processes. According to the CUSO, this provides a chance for staff to learn from network partners and is open to all staff, not limited to the Lending and Collections departments of credit unions.

To review Roundtable course details, access the registration page at http://cuanswers.com/education/syllabi/?course=SE.51.

Posted in Press Releases | Tagged Audit Link, Lender*VP, Press Release Center | Comments Off

Good Director Practices I – Fundamentals

By Joe Spenski| Published on May 02, 2011

Recently CU*Answers taught a class on the basic responsibilities and mechanics of being a board member. This class is the first in a set of three on good practices for board members, and can be applied for board members who sit on credit unions and non-profits, as well as individuals who sit on for-profit boards. The handout focuses on four areas: board member accountability, board mechanics, CEO relations, and board member liability. Following the link below for the document.

Good Director Practice I – Fundamentals

Posted in Best Practices, Recent hotbuttons | Comments (0)

ATM Fee Vigilantes Filing Reg E Lawsuits Against Credit Unions

By Joe Spenski| Published on Apr 29, 2011

Individuals across the country are filing lawsuits against credit unions and banks for failing to place surcharge notices on their ATMs. Financial institutions in Michigan, California, and Illinois have been hit hard by the recent suits which claim that the terms of the Electronic Funds Transfer Act (EFTA, or Reg E) are violated when the institution fails to post notice on or at the ATM that non-members will be assessed a surcharge. More than 30 suits are pending in Michigan alone.

The language of EFTA requires an ATM customer be told up-front when a fee will be charged, how much the fee is, and the opportunity to cancel the transaction. Some of the lawsuits are class actions, which in theory could mean all of a credit union’s ATM customers may qualify for reimbursement.

http://www.ncua.gov/Resources/RegulatoryAlerts/Files/Prior2003/01-RA-06.pdf

http://www.fdic.gov/news/news/financial/2009/fil09066.html

http://www.cutimes.com/2011/01/13/big-spike-seen-in-atm-fee-disclosure-lawsuits

Posted in Recent hotbuttons | Comments (1)

Dormancy Webinar for Michigan Clients

By Joe Spenski| Published on Mar 22, 2011

Here is a copy of the Dormancy webinar from March 18th that was directed to our Michigan clients.

Dormancy-Michigan WebConference

Posted in CU*BASE tool hints for compliance and auditing | Comments (0)