SAN ANTONIO -- Disclose more to your members and make a concerted effort to comply with all the new government regulations. That's the advice compliance expert Steve Gibbs gave attendees at the NASCUS State System Summit.
Gibbs said even though credit unions mostly act in good faith, they have to face additional regulations, just like the bad actors.
"While [only] one kid put the worm in the teacher's apple, everyone has to stay after school," he quipped.
The increase in regulations shouldn't prevent credit unions from continuing to innovate and go the extra mile to serve their members. However, they must be extra careful to be sure they know all the rules and that any changes they make are in keeping with the new rules.
He said new rules regarding mortgages require more complete disclosure of balloon payments and possible penalties.
"There is more impetus to explain everything to members," he noted. Gibbs advised credit unions to be extremely diligent in reviewing their operations and to hire experienced loan officers.
In addition, he suggested a comprehensive assessment of interest rate risk and said this is often tied to concentration risk.
In addition, he advised credit unions to be sure that their data collection methods are in good shape because that is a key component of the regulatory overhaul bill. "The new [consumer financial] agency can't necessarily tell you what to do, but they can ask you for data," he said.