regulatory and compliance issues and considerations

More documents

Recommendations

Info

You asked about the authority of a federal credit union’s (FCU’s) board of directors to approve loans and when and how the board could approve loans that are outside the loan approval authority delegated to the FCU’s loan officers or credit committee. Our thoughts, including some options available to the board, follow. The FCU Act states that “loans must be approved by the credit committee or a loan officer . . . . ” 12 U.S.C. §1757(x). Generally, if a credit committee or a loan officer does not consider a loan application first, an FCU’s board of directors may approve a loan only if the FCU Act provides specific authority for the board to act on that type of loan. For example, an FCU’s board must approve loans to directors or supervisory or credit committee members exceeding $20,000 plus pledged shares. 12 U.S.C. §1757(iv). We understand that an FCU’s board may not want to delegate the authority to approve every type of loan or may want to be involved in the decision-making on some loans, such as loans that are part of a new area of lending for the FCU or particularly large loans. An FCU may, consistent with the FCU Act, restructure its lending processes in various ways to increase its board’s involvement. For example, if its bylaws provide for a credit committee, an FCU board could appoint itself or some of its members to serve as the FCU’s credit committee. FCU Bylaws (10/99), Article VIII, Option 1. Alternatively, an FCU could modify its lending policies to create two levels of review and approval for certain loans: first, by a loan officer or credit committee, and, second, by the board of directors or a committee consisting of directors. We caution that FCUs must comply with the various statutory and regulatory requirements for lending, including the experience requirements placed on member business lending. 12 C.F.R. §723.5(a). We also caution that FCUs may only make loans as provided in their written lending policies. Id.; 12 C.F.R. §701.21(c)(2). An FCU that provides an expanded role for its board in the lending process must ensure that the authority of all persons involved in lending, including the board or a committee of board members, is described in those policies and that the FCU maintains proper segregation of duties. Lending policies must also be designed and implemented to ensure that an FCU does not make loans on an ad hoc basis or in an arbitrary fashion, but in accordance with the limits and criteria of its written lending policies. Sincerely, Sheila A. Albin Associate General Counsel OGC/PMP:bhs 02-0737 Purpose and Scope of the IT Security Compliance Guide This IT Security Compliance Guide1 is intended to help credit unions2 comply with the Interagency Guidelines Establishing Information Security Standards (NCUA Rules & Regulations, Part 748, Appendix A&B). The guide summarizes the obligations of credit unions to protect information, and Copyright©1994-2010 by Credit Union Resources & Educational Services, LLC. All rights reserved. Revised February 2010 14
illustrates how certain provisions of the National Credit Union Administration Rules and Regulations, Part 748, Appendix A & B (Security Guidelines) apply to specific situations. The appendix lists resources that may be helpful in assessing risks and designing and implementing information security programs. - Dual control procedures, segregation of duties, and employee background checks for employees with responsibilities for, or access to, member information; LINES OF COMMAND AND INSURING THE COMMAND STRUCTURE AND PLANNING Examination Standards and Surviving Regulatory Assessments A. The Reality About those who Examine Us B. Documentation Standards: SAMPLES: Copyright©1994-2010 by Credit Union Resources & Educational Services, LLC. All rights reserved. Revised February 2010 15
Page 1 and 2: Compliance Update - I REGULATORY AN
Page 3 and 4: Introductory Notes: Basic Obligatio
Page 5 and 6: performed by boards of directors. T
Page 7 and 8: What if an applicant “volunteers
Page 9 and 10: Please answer the following questio
Page 11 and 12: MULTIPLE ISSUES AND RESOURCES - SOM
Page 13: • Review of the negative shares r
Page 17 and 18: SAMPLE CREDIT UNION BUSINESS PLAN M
Page 19 and 20: EMPLOYMENT AGREEMENT Revise to addr
Page 21 and 22: 13. Evaluate the job performance of
Page 23 and 24: 2. By Employer For No Cause. Employ
Page 25 and 26: Vendor Due Diligence II Security As
Page 27 and 28: Vendor Due Diligence VII TERM AND T
Page 29 and 30: Vendor Due Diligence XII Backgroun
Page 31 and 32: Monitoring the Vendor At a minimum,
Page 33 and 34: NOTE: The BSA also contains a “wh
Page 35 and 36: (5) Confidentiality of reports. SAR
Page 37 and 38: PRIVACY - INFORMATION SECURITY Priv
Page 39 and 40: Disposal of Consumer Reports and Ot
Page 41 and 42: Compliance Update - II REGULATORY A
Page 43 and 44: Introductory Notes: Knowing if you
Page 45 and 46: I. POLICY AND GUIDELINES Portions O
Page 47 and 48: any CUSO. [Gifts may not be accepte
Page 49 and 50: Conference and Seminar Costs Fees f
Page 51 and 52: We have stated that there must be a
Page 53 and 54: IV. POLICY REGARDING CONFLICTS OF I
Page 55 and 56: public, even though, such relatives
Page 57 and 58: and other relatives who live in the
Page 59 and 60: protection, and the reimbursement o
Page 61 and 62: Legal / Compliance Consultation Not
Page 63 and 64: MERGER AND CONSOLIDATIONS ISSUES NO
Page 65 and 66:
information of which unauthorized d
Page 67 and 68:
A Review of ‘Red Flags’ and wha
Page 69 and 70:
Business Depositors: Understanding
Page 71 and 72:
WHAT POLICIES, PROCEDURES AND RISK
Page 73 and 74:
16. Conflict of Interest/Code of Et
Page 75 and 76:
Union Assessment 33. Identity Theft
Page 77 and 78:
Procedures 60. Training Policy See
Page 79 and 80:
Also - consider the other changes c
Page 81 and 82:
policies, procedures and documents
Page 83 and 84:
Underwriting Advertising In July 20
Page 85 and 86:
135-2009 Community Notice // OE/CE
Page 87 and 88:
Credit Union’s lien right are not
show all

regulatory and compliance issues and considerations

Create successful ePaper yourself

Delete template?

Save as template?