ROCKVILLE, Md. -- Innovative Strategic Solutions LLC has justdeployed a Web-based risk management solution for managing vendorrelationships at a pair of credit unions.

The VendorXpert system will help the $103 million PrinceGeorge's Community FCU in Upper Marlboro, Md., and the $46 millionHealthcare Systems FCU in Falls Church, Va., manage theirthird-party relationships and comply with NCUA rules for duediligence, the company said.

The VendorXpert system is from Florida-based Sydel Corp. andallows credit unions to perform risk assessment, monitoring andmanagement of contract dates and clauses, according to ISS(www.issone.com), a Rockville-based provider of collectionoutsourcing, credit card processing, training conferences andsoftware solutions to credit unions.

"We believe that with VendorXpert we should be able to identify,monitor and control our risks related to third-party vendorswithout increasing our staff," said Cindy Prestandrea, CEO ofPGCFCU.

NCUA Outlines Rules on Suspensions

ALEXANDRIA, Va. -- Federal credit unions can suspend services tomembers if there is a "logical relationship between theobjectionable conduct and the services to be suspended," accordingto an opinion letter by NCUA Associate General Counsel SheilaAlbin.

She wrote the opinion for Debra Dropplemen, the chief financialofficer of the Fairmont Federal Credit Union in Fairmont, W.Va.,whose credit union has drafted a proposal to allow suspendingservices to members who abuse staff or present a risk of loss tothe credit union.

Albin wrote that a federal credit union can deny access to acredit union premises if a member has been abusive or threateningtoward staff. Also, she said a credit union can deny a creditextension if a member has caused a loss or presented counterfeititems for cash or deposit.

She said any actions must not be based on suspicion of wrongfulactivity or done without a written policy in place of which allmembers are aware.

NCUA OKs Locked Box Accounting Services

ALEXANDRIA, Va. -- Federal credit unions can provide locked boxaccounting services to their members, according to an NCUA legalopinion.

Programs allowed by NCUA include pre-authorized membertransactions and loan-collection services, which is what BethexFederal Credit Union in Bronx, N.Y., was asking about.

Joyce Cousminer, Bethex FCU's president/CEO, wrote the agency toask if the credit union could collect monthly rental payments for ahousing cooperative and then pay bills for the cooperative andreconcile the account ledger to the monthly statements.

"The services you have in mind on behalf of your member arepermissible," NCUA Associate General Counsel Sheila Albin wroteCousminer.

Fryzel Meets With Illinois CU Regulator

CHICAGO -- Continuing his round of get-acquainted meetings, NCUABoard Chairman Michael E. Fryzel recently met with IllinoisDivision of Financial Institutions Director Robert E. Meza andvisited and toured two credit unions.

"State regulators and NCUA share the same goal of fostering anenvironment that promotes safe, sound and forward-looking creditunions," Fryzel told the Illinois state regulator.

Fryzel, who held Meza's job during the 1980s, said his ownexperience has "afforded me a perspective that recognizes thecommonalities in federal and state approaches, and I am pleased todiscuss a wide variety of issues of mutual concern during thismeeting with Director Meza. I look forward to exploring new ways toenhance dialogue between the state and federal systems."

He also met with Selfreliance Ukrainian American FCU CEO BohdanWatral and received a tour of the credit union's operations andfacilities and did the same with North Side Community FederalCredit Union Manager Ed Jacob.

"These credit unions exemplify the central role that creditunions can and should play in the financial lives of communities,"commented Fryzel. "Both institutions exemplify the people helpingpeople philosophy while giving their members access to affordable,up-to-date financial services. These credit unions set a very highstandard, and I look forward to experiencing first-hand moreexamples of this kind of approach across the nation."

NCUA Names Kutchey to No. 2 Position
In Office of Examination and Insurance

ALEXANDRIA, Va. -- John Kutchey, director of risk management atthe NCUA, has been named deputy director of the agency's Office ofExamination and Insurance.

Kutchey will assist the department in overseeing the agency'ssupervision and examination program, risk management and datacollection programs.

"John Kutchey has long been an asset to NCUA's executivemanagement team," said NCUA Director J. Leonard Skiles. "In fillingthis important leadership position, John will bring valuable fieldmanagement expertise that will serve to further strengthen theagency's supervision and examination program."

Kutchey joined NCUA in 1990 as an examiner in Baltimore andsince then has held a range of positions with increasedresponsibility. He successfully completed NCUA's executivedevelopment program in 2004 and has received numerous awardshighlighting his accomplishments and contributions to NCUA. Hegraduated magna cum laude from the University of Baltimore in 1990with a bachelor's degree in business administration and aconcentration in accounting.

He succeeds Larry Fazio, who was promoted to be the agency'sdeputy executive director earlier this year.

NCUA Clarifies Share Insurance Rules

ALEXANDRIA, Va. -- NCUA recently explained that a state's creditunion deposit trust fund is insured up to $100,000, but if thetrust is in the name of an individual, all the individual'saccounts are added up when determining how much is covered.

A board account qualifies as a regular government account andthus is only covered by the NCUSIF up to $100,000, according toNCUA.

But if the funds in a CU trust are owned by an individual, thevalue of the accounts is added up with the individual's otheraccounts and only $100,000 of deposits are insured.

"To be fully insured, however, carefully titling of the accountsand proper records are necessary because a participant's interestmust be ascertainable from the credit union or state's records,"NCUA wrote Wisconsin State Treasurer Dawn Marie Sass and WisconsinState Senator Alberta Darling, who chairs the College Savings FundBoard.

CUNA Mutual Offers Webinar on Red Flags

MADISON, Wis. -- Credit unions needing help to devise anidentity theft prevention plan to comply with the new regulationtaking effect Nov. 1 can consult a free Webinar posted by CUNAMutual.

The Web program, which can be accessed at www.cunamutual.com,deals with government rules on how financial institutions can spotidentity theft red flags.

"CUNA Mutual is making this Webinar and white paper available asresources for credit unions to meet the Nov. 1 compliance deadlineand help reduce the effects of ID theft for themselves and theirmembers," said CUNA Mutual Vice President of Credit UnionProtection Chad Nitschke. "Additionally, CUNA Mutual's riskmanagement team sent multiple RISK Alerts to keep credit unionsinformed of the new rules and notify them of the availableresources offered by CUNA Mutual to assist in their complianceefforts."

To comply with the rule, credit unions must develop a writtenprogram for identity theft prevention and assess the validity ofaddress change requests when followed closely by a request for anadditional or replacement credit or debit card.

The final red flag rules are located at:http://www.ftc.gov/opa/2007/10/redflag.shtm.

NCUA Plans Symposium Marking Its 75th

WASHINGTON -- NCUA is holding a symposium next June to celebratethe 75th anniversary of the act that began federal regulation ofcredit unions.

The event, which will take place on June 9 and 10 at the HyattRegency Washington on Capitol Hill, will "focus on the currentfinancial marketplace, the importance of federal deposit insurance,opportunities for credit unions to serve all segments of theirfield of membership and opportunities for

modernization of the Federal Credit Union Act," according to theNCUA.

The measure, which was signed by President Franklin D. Roosevelton June 26, 1934, was part of a series of financial regulationsdesigned to remedy what some saw as the failures of the free marketthat helped trigger the Great Depression.

NCUA Board Member Gigi Hyland will host the symposium, which isopen to the public at no charge. Details about the agenda for theevent, which is one of several planned to mark the anniversary,will be released at a later date.

Those wanting to reserve a room at the hotel for those dates cando so by going to the Web site:http://washinngtronregency.hyatt.com or calling 202-737-1234.