CUs Tally Up the Rising Cost Of the Compliance Burden
Regulatory burdens stemming from the Bank Secrecy Act, Dodd-Frank Act and the Department of Housing and Urban Development, among others, add another layer of responsibility to credit unions’ day-to-day operations. Complaints of rising compliance-related costs are common, but just how much is compliance costing CUs, and how are they paying for it?
Credit unions have found themselves hiring new employees, implementing new software and bringing in third parties to conduct reviews and audits in order to ensure compliance. And many say the value derived from these investments is low.
“Although we are a leading credit union in regards to return on assets, the NCUA has significantly scrutinized us, like they have with many of our peers,” Zide said.
Mark Willer, chief operating officer for the $1.3 billion, 140,000-member Royal Credit Union said it’s hard to attach a monthly dollar amount to his Eau Claire, Wis.-based credit union’s compliance costs, but the increased costs are hurting members because the CU now spends less time on member service and new product development.