For the most part, the nation's 30 corporate credit unionsoperate behind the scenes, focusing on benefiting natural personcredit unions in the way of investments, new products and servicesand technology. However, as September 11th, 2001 changed the worldfor most of us in many ways, it also altered business within thefinancial services industry. Now, in our world of color codedalerts, airport security measures and barricaded streets leading toplaces of political power, corporate credit unions have stepped outfront to do their part in the war against terror - and that is tocombat terrorist financing. Most of what we read regarding the costassociated with the war on terror involves financing our militaryoperations in Iraq, covert preventive operations at home and inforeign lands and employing security measures to protect innocentcitizens as they go about their lives. What you don't read about isthe tremendous cost of some of the other requirements of asuccessful fight, namely, the cost of the financial servicesindustry's effort to combat terrorist financing. Since theenactment of the USA PATRIOT Act, the compliance efforts requiredof corporate credit unions have been intense. In the past,corporate credit unions were required to have a Bank Secrecy Act(BSA) program, but as a third party processor of wire and cashtransactions for credit unions, the onus of suspicious activity(SAR) and cash transaction reporting (CTR) fell to the naturalperson credit unions. Now, corporate credit unions are required todevelop and implement customer identification programs, monitortransactions on a more detailed level, conduct searches for 314 (a)information sharing purposes, to conduct enhanced due diligence, toimplement anti-money laundering programs (AML), to ensure propercontrols, to train personnel on an annual basis. All this requireshuman and monetary resources. This is in addition to, and doesn'ttake the place of, everything the natural person credit must do. Iasked various corporate credit unions across the country todescribe their efforts to combat terrorist financing as they complywith the Bank Secrecy Act, the Office of Foreign Asset Control'sregulations and the USA PATRIOT Act. What I found was an impressivemobilization of resources and human time and energy in an effort tobe meaningful soldiers in this war. In the past year alone,Mid-States Corporate FCU formed a new Correspondent ServicesCompliance Committee. The committee is charged with theresponsibility of ensuring that all compliance programs relating tocorrespondent services meet or exceed NCUA regulation requirements.Mid-States Corporate recently purchased new software and hardwareto provide for more sophisticated monitoring of high-risktransactions at a cost of roughly $80,000. Regulatory monitoringwithin the correspondent services area requires an additional twofull-time staff members per year at a cost of over $100,000 peryear. Mid-Atlantic Corporate FCU's compliance cost is five timeshigher than it was five years ago. A position of compliance officerwas created. This senior position manages a myriad of complianceissues within Mid-Atlantic and also the consequences for theirmembership. They have seen a loss of employee productivity thatrelate to actual services for credit unions because of the need forstaff to monitor compliance activities. Mid-Atlantic has alsodedicated the financial resources to take a leading role ineducating its members as to sound compliance activities. FirstCarolina Corporate CU believes a successful organization is largelydefined by its commitment to its own community, which includesbeing a good corporate citizen. They have one full-time-equivalentemployee dedicated to ensuring compliance with the laws mentionedabove as well as another important function, ensuring datasecurity. This corporate also actively assists member credit unionsin their own efforts to ensure regulatory compliance. Othercorporates with whom I talked stated that usually theresponsibility for monitoring compliance gets added to a seniormanager's current responsibilities. Some of these senior staff haveremarked that they feel like "BSA compliance" is their main jobnow, and that some degree of member service is being sacrificed.This constitutes a cost that is unquantifiable and especiallyimportant for corporates because we are in business to solely servecredit unions. The credit union movement took hold in this countrybecause Americans naturally gravitate toward opportunities thatafford them empowerment, independence and progress. It would beunnatural for us to accept any less. When those opportunities arethreatened or impeded in any way, we will do what it takes toensure the benefits we've attained through hard work and ingenuityare preserved. A trademark characteristic of credit unions is asense of community and that is exemplified in the efforts ofcorporate credit unions as we strive to protect our members and theinterests of the millions they serve.