ROCKVILLE, Md. -- Innovative Strategic Solutions LLC has just deployed a Web-based risk management solution for managing vendor relationships at a pair of credit unions.

The VendorXpert system will help the $103 million Prince George's Community FCU in Upper Marlboro, Md., and the $46 million Healthcare Systems FCU in Falls Church, Va., manage their third-party relationships and comply with NCUA rules for due diligence, the company said.

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

"We believe that with VendorXpert we should be able to identify, monitor and control our risks related to third-party vendors without increasing our staff," said Cindy Prestandrea, CEO of PGCFCU.

NCUA Outlines Rules on Suspensions

ALEXANDRIA, Va. -- Federal credit unions can suspend services to members if there is a "logical relationship between the objectionable conduct and the services to be suspended," according to an opinion letter by NCUA Associate General Counsel Sheila Albin.

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

Albin wrote that a federal credit union can deny access to a credit union premises if a member has been abusive or threatening toward staff. Also, she said a credit union can deny a credit extension if a member has caused a loss or presented counterfeit items for cash or deposit.

She said any actions must not be based on suspicion of wrongful activity or done without a written policy in place of which all members are aware.

NCUA OKs Locked Box Accounting Services

ALEXANDRIA, Va. -- Federal credit unions can provide locked box accounting services to their members, according to an NCUA legal opinion.

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

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

"The services you have in mind on behalf of your member are permissible," NCUA Associate General Counsel Sheila Albin wrote Cousminer.

Fryzel Meets With Illinois CU Regulator

CHICAGO -- Continuing his round of get-acquainted meetings, NCUA Board Chairman Michael E. Fryzel recently met with Illinois Division of Financial Institutions Director Robert E. Meza and visited and toured two credit unions.

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

Fryzel, who held Meza's job during the 1980s, said his own experience has "afforded me a perspective that recognizes the commonalities in federal and state approaches, and I am pleased to discuss a wide variety of issues of mutual concern during this meeting with Director Meza. I look forward to exploring new ways to enhance dialogue between the state and federal systems."

He also met with Selfreliance Ukrainian American FCU CEO Bohdan Watral and received a tour of the credit union's operations and facilities and did the same with North Side Community Federal Credit Union Manager Ed Jacob.

"These credit unions exemplify the central role that credit unions can and should play in the financial lives of communities," commented Fryzel. "Both institutions exemplify the people helping people philosophy while giving their members access to affordable, up-to-date financial services. These credit unions set a very high standard, and I look forward to experiencing first-hand more examples 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 at the NCUA, has been named deputy director of the agency's Office of Examination and Insurance.

Kutchey will assist the department in overseeing the agency's supervision and examination program, risk management and data collection programs.

"John Kutchey has long been an asset to NCUA's executive management team," said NCUA Director J. Leonard Skiles. "In filling this important leadership position, John will bring valuable field management expertise that will serve to further strengthen the agency's supervision and examination program."

Kutchey joined NCUA in 1990 as an examiner in Baltimore and since then has held a range of positions with increased responsibility. He successfully completed NCUA's executive development program in 2004 and has received numerous awards highlighting his accomplishments and contributions to NCUA. He graduated magna cum laude from the University of Baltimore in 1990 with a bachelor's degree in business administration and a concentration in accounting.

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

NCUA Clarifies Share Insurance Rules

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

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

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

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

CUNA Mutual Offers Webinar on Red Flags

MADISON, Wis. -- Credit unions needing help to devise an identity theft prevention plan to comply with the new regulation taking effect Nov. 1 can consult a free Webinar posted by CUNA Mutual.

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

"CUNA Mutual is making this Webinar and white paper available as resources for credit unions to meet the Nov. 1 compliance deadline and help reduce the effects of ID theft for themselves and their members," said CUNA Mutual Vice President of Credit Union Protection Chad Nitschke. "Additionally, CUNA Mutual's risk management team sent multiple RISK Alerts to keep credit unions informed of the new rules and notify them of the available resources offered by CUNA Mutual to assist in their compliance efforts."

To comply with the rule, credit unions must develop a written program for identity theft prevention and assess the validity of address change requests when followed closely by a request for an additional 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 celebrate the 75th anniversary of the act that began federal regulation of credit unions.

The event, which will take place on June 9 and 10 at the Hyatt Regency Washington on Capitol Hill, will "focus on the current financial marketplace, the importance of federal deposit insurance, opportunities for credit unions to serve all segments of their field of membership and opportunities for

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

The measure, which was signed by President Franklin D. Roosevelt on June 26, 1934, was part of a series of financial regulations designed to remedy what some saw as the failures of the free market that helped trigger the Great Depression.

NCUA Board Member Gigi Hyland will host the symposium, which is open to the public at no charge. Details about the agenda for the event, 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 can do so by going to the Web site: http://washinngtronregency.hyatt.com or calling 202-737-1234.