We all know that ignorance is no excuse for failing to obey thelaw. Yet maintaining razor-sharp knowledge of the rules governingfinancial services is a fulltime job. To really do it right, creditunions need a person — sometimes many people — to create and followa calendar of proposed and final rules, train staff on the ins andouts of compliance, and make all the program and operationalchanges necessary to follow the rules.

But for many credit unions, a staff person to do that fulltimejob just isn't viable. Those of us at the league level havewitnessed first-hand the struggles faced by credit union executiveswho want to play by the rules, but aren't entirely confident theyknow what the rules are.

Where most credit unions and league personnel get stuck isn'tnecessarily in the reading of the rules. After all, they aregenerally written in black and white and publicly accessible.Rather, we want to understand exactly how those rules will beinterpreted and what steps need to be taken at the credit union toensure compliance by any number of deadlines.

A good example is the recent changes requiring financialinstitutions to disclose credit scores and related information whena credit score is used in taking adverse action. Determining when acredit score is used is fuzzy, tempting some to disregard the ruleif a credit score was not the key factor used in denying credit. Asimple word like “used” can be interpreted in so manyways.

To help Nebraska credit unions decipher the rules, the NebraskaCredit Union League has partnered with PolicyWorks, a complianceconsulting firm with a focus on credit unions. The consultants inthis group have agreed to field NCUL members' compliance questionsas they arise. They provide this on-demand compliance assistancefor federal regulatory issues.

To date, our members have relied on these experts for theanswers to questions like: “My examiner made a finding regardingthe use of a tax assessment. What are the new appraisal rules, andwhy can't I use a tax assessment?”

Or, “we understand that the risk-based pricing rule has changed.What form do we need to provide our members and when is that changeeffective?” And, “what if a credit score was not the main reason wedenied a loan? Do we still have to include the credit score on theadverse action?”

Beyond simply following the rules, Nebraska credit unions arelike many others in the country; they want the opportunity to helpshape the rules. But to take a proactive role in development of therules, credit union executives need to understand and follow thetimetables set forth by federal agencies.

Again, we're facing a resources challenge. If a credit uniondoes not employ a full-time compliance officer, who at the creditunion has the bandwidth to own this task? Who will rally the rightpeople, gain a complete understanding of the credit union'sposition, and then author and submit comments?

With the support of third-party consultants knowing policy andrule-making inside out, our league is able to help member creditunions keep watch over rules as they develop. We're able tocommunicate not only the when, but the why, of commenting onproposed final rules. We're able to do this for many credit unionsat once – giving our state the best chance possible for proactivelyshaping policy and maintaining efficiency inside our ownorganization.

Surround yourself with experts is the rule of thumb followed bymany small businesses. This should also be a guiding principle forcredit unions, especially for those who don't have in-houseresources. 

Scott Sullivan ispresident/CEO of the Nebraska Credit Union League.