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LAS VEGAS – From rising violations of the Bank Secrecy Act to false “rumors” about a slowdown in community charter approvals, credit union executives assembled here for the NAFCU conference heard an array of admonitions and assurances from a trio of NCUA regional directors. Providing the “NCUA Update,” as the panel was called, were: Edward P. Dupcak, Alexandria, Va. the top supervisor for Mid-Atlantic Region II; Alonzo A. Swann III, Atlanta, heading up South Region III, and Jane Walters, Austin, Tex. in charge of Texas/Plains Region IV. Regarding compliance issues surrounding the Bank Secrecy Act, Swann told the group that his Southern states region has recently witnessed a sharp jump in violations from 22 to 311 as examiners continue to find reporting and record keeping problems. “The priority should be proper training,” Swann warned the NAFCU group noting examiners would start coming down harder on “repeat violators.” He detailed the administrative procedures examiners are using to handle violations culminating in “cease and desist” and civil penalties. While voicing the warning, Swann praised CUs for doing a good job in correcting problems but said the Atlanta region had 22 violations last October and most recently the monthly total hit 311, an indication “of work to be done.” He suggested CUs concentrate on “training development and independent testing” because “you don’t want to experience the problems of a couple of $25 million banks” earlier this year which were hit with severe penalties by bank agencies. “We don’t want any stuff like that to happen to credit unions,” said Swann. In her remarks, Walters of Region IV said she wanted to squelch “rumors” circulating for weeks that the agency was slowing down on community applications noting that 120 were approved last year “and we’ve had 64 so far this year.” “The record year was 137,” she said underscoring that NCUA is not engaged in any kind of slowdown and the approval process “is alive and well.” Curiously, despite Walters’ key regulatory role in the mutual conversion controversy surrounding Community CU of Plano, Tex., she did not bring the matter up in her remarks nor were there questions from the floor. That could suggest perhaps that while the NCUA denial is the hottest issue in Washington and Dallas, NAFCU delegates including the many volunteer directors in the audience had other concerns. A reporter did ask her for comments about the recent federal district court suit brought in Austin against NCUA and she simply replied “no comment” referring the matter to NCUA staffers in Washington. The third regional director, Dupcak of Region II discussing interest rate risk warned CUs to be wary of “exotic” products in the real estate market and “to take a harder look” before venturing into this sector. Dupcak also touched on the loss of small CUs across the Northeast noting that of 1,400 CUs, 85O are under $1 million in size and that the merger trend continues to accelerate in Region II. In answer to a question, Swann said the NCUA insurance fund remains in good shape with minimal losses traced to CU fraud and data processing cases. [email protected]

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