Building a Strong CMS Program

A strong CMS that supports a credit union's ERM process should include several elements:

Policies, a compliance risk assessment, written procedures, data analysis, a regulatory change management process and marketing review process. For example, implement a review process that prevents disclosures from being created by the line of business without signoff by the compliance leader.
Compliance monitoring based on the risks identified. Deferred compliance obligations are approved by the advisory committee.
Full accountability and responsibility by the compliance officer to talk to the regulators. If there is an accountable group designated to oversee compliance, which often is called a designated "compliance by committee," only one person on the committee is designated to be the contact with regulators.
Ownership. Each of the three lines of defense takes ownership of its respective areas of responsibility.
A centralized process for change management. One person (usually the compliance officer or team) takes responsibility for identifying new regulations, determining who needs to be updated and how the news is communicated.
KRIs based on the credit union's strategic objectives. The KRIs are monitored monthly and communicated to the board of directors for insight into the compliance process. Risk and growth are considered concurrently.

Simple, but Difficult

As a credit union's senior leadership reviews and revises strategy, it looks at its enterprise risk. Since compliance risk is a key component of enterprise risk, those charged with compliance responsibilities must recognize the critical importance of their roles. If compliance isn't treated with the care regulators require, the credit union will not achieve its strategic goals. Leadership's role in compliance is of critical importance. It's as simple – and as difficult – as that.

Instant Insights /

Lack of Compliance Focus Puts Your Business Strategy at Risk

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