Cole McCollum with his wife and children

Guest Blogger: Cole A. McCollum, AVP & Compliance Officer at Louisville Metro Police Officers Credit Union

"Compliance is member service." I remember the first times those words resonated against my ear drums. I was sitting in a conference room in San Antonio during this Spring's CUNA Regulatory Compliance School. The speaker was trying to get us "psyched up" for the rigorous learning about to ensue. "This stuff is not meaningless," he remarked, "It is for the good of our members. Compliance is member service." I must admit, at first hearing my mind rejected the statement as overly idealistic. "Surely there must be more important things we can do for our members than worry about so many minute regulations," I thought. After all, Credit Union's exist – or ought to exist – for the benefit of their members.

The Oxford Dictionary defines a union as a "society or association formed by people with a common interest or purpose." From their humble beginnings over a century ago, Credit Unions have proved to be exactly this: groups of people formed around a common interest – the not-for-profit production of sound, trustworthy financial services for their members. How does compliance with NCUA and other government regulations serve this "common interest"?

Upon further consideration, I must pose the question: How does it not?

Digesting the conference speaker's words, a different opinion has formed in my mind. Why do regulations exist? No matter what commercial landscape is being considered, regulations exist to control and otherwise ensure sound, safe practices in accordance with the rules of law. Ideally, they are enacted for the betterment of commerce and the security of those engaging in it. To be sure, there are regulations in existence within Credit Union-Land which are overly scrupulous and needlessly binding. However, most are in place to bridge the gap between an ever more complex cyber-world and the needs of our members. With the development of new products and services and the constant advancement of financial technologies, our member's needs remain primarily unchanged. To ensure these needs are not overlooked and to maintain commercial soundness, regulations are enacted. A recent example will serve to illustrate this.

The Daily Loans: Interest report generated within Sharetec is a way for loan or compliance officers to review recent loan disbursements and ensure right interest rates are granted. During the recent training of a new loan officer, I pulled this month's report and perused it with her. While I rarely find any interest-rate discrepancies, I found two on this report. One case involved an interest rate higher than the member's credit should earn per our policy; the other, a rate lower than our policy mandated. In both cases, the Daily Loans: Interest report enabled me to bring these loans into compliance with our own internal policy and the pertinent regulations involving interest rates. In so doing I benefited both the member's involved and our Credit Union as a whole.

In conclusion, here a few brief take-aways:

  1. Inhabitants of Credit-Union Land: Don't despise the compliance officer! While sometimes nerdy and occasionally annoying, they are important parts of the member-service machine.

  2. Lowly Compliance Officer: Don't despair! Your job is important, and you are providing member service through the peculiar rigors of your work.

  3. Credit Union CEO's and Board Members: Implement whatever tools necessary to help your Credit Union manage the ever-changing seas of compliance. Choose an operating system that is user-friendly, adaptable, and easily appropriated for compliance needs. Specifically, consider the reports you are able to run and the ways in which these aid you in better serving your members (while simultaneously keeping your auditors happy). Perhaps check in with your compliance officer and garner feedback as to how he / she likes your current operating system.

Sharetec is a fantastic partner for our Credit Union. However, whatever operating system you use, ensure it helps your Credit Union manage compliance and consistently provide excellent member service.