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Compliance Update with Amy K by Amy Kleinschmit, Chief Compliance Officer ACH Rules Effective June 30 Two NACHA rules are effective at the end of the month which relate to warranty claims and reversals. With regard to warranty claims, NACHA’s final rule will limit the length of time in which an RDFI will be permitted to make a claim against the ODFI’s authorization warranty. More information, including FAQs, can be found here. Note that the effective date applies to an RDFI’s ability to make a claim, and not to the settlement dates of entries. NACHA’s reversal final rule, which can be found here addresses improper uses of reversals and establishes formatting requirements for reversals. It also expands the permissible reasons for a reversal to include a “wrong date” error: 1) the reversal of a debit Entry that was for a date earlier than intended by the Originator; or 2) a credit Entry that was for a date later than intended by the Originator. NCUA Request for Comment - NOL The National Credit Union Administration (NCUA) is seeking feedback on its policy for setting the Normal Operations Level (NOL). The request for comment can be found here and comments must be received by July 26, 2021. Normal operating level means an equity ratio not less than 1.2 percent and not more than 1.5 percent, as established by action of the NCUA Board. As explained in the discussion of the request for comments, “the current economic landscape and pending events related to the corporate asset management estates and NGN Program warrant a re-evaluation of the current Normal Operating Level policy. The current policy objectives include ensuring the Insurance Fund can withstand a moderate recession without the equity ratio declining below 1.2 percent over a five-year period. The economic conditions posed by the pandemic, including industry-wide, unprecedented share growth resulted in an equity ratio of 1.26 percent as of December 31, 2020. These issues have forced the NCUA to consider the ongoing feasibility of using a moderate recession and a five year performance period as the basis for stressing the equity needs of the Insurance Fund.” The NCUA proposed nine questions in its request for comment, however, it is also encouraging comments on any other relevant issues that the NCUA Board should consider. A few of the proposed questions include: Should a moderate recession be the basis for evaluating the Insurance Fund performance during an economic downturn, or should the NCUA change the policy to consider a severe recession? What data source(s) should the NCUA use for determining the characteristics of a potential moderate or severe recession - the Federal Reserve scenario, an independent source, or the NCUA’s judgment? Should the NCUA continue modeling the performance of the Insurance Fund over a five year period or a longer or shorter period? How should the NCUA utilize the modeled potential decline in value of the Insurance Fund’s claims on the corporate asset management estates going forward until the estates are fully resolved? FTC Warning on Scammers The Federal Trade Commission (FTC) recently posted this blog “More money is coming to families…and scammers are ready.” The article contains good reminders to help protect members. Only the IRS will be sending these payments from the American Rescue Plan Act. Anyone trying to “help” you get your child tax credit is really after your money. The government will NEVER call, text, email, or DM you out of the blue, asking for money or information. Keep your money — and your Social Security, bank account, debit and credit card numbers — to yourself. Nobody legit will ever demand that you pay by gift card, wire transfer through companies like Money Gram or Western Union, or cryptocurrency. That’s a scam, every time. CU Policy Pro The new CU Policy Pro system has launched. Here is a list of FAQs regarding this new platform - CU PolicyPro New System FAQs.pdf Also – be sure to check out the series of live webinars to introduce you to (or reacquaint you with) CU PolicyPro. The webinar sessions are FREE, but registration is required. Please click here to find a listing of available webinars. All webinars will be recorded and added to the Support area of CU PolicyPro for on-demand viewing. The first webinar in the series, All About Policies, is now available for viewing! AffirmX What can help your credit union meet compliance challenges in a proactive and cost-efficient manner? Please take a three-minute break from reading and learn how AffirmX can help you: http://youtu.be/27TLDXcjETE. AffirmX Risk Intel Center helps credit unions adhere to government regulations through a patented, cloud-based platform that is customized and branded for your institution. The platform draws on internal and external data sources to develop risk-based priorities to help you quickly identify issues, reduce costs, and streamline compliance management practices. Unlike checklist-based systems that place the burden for understanding compliance requirements on your team, Risk Intel Center combines easy-to-use workflows with expert analysis and a risk-based dashboard to help your team stay on top of compliance issues ranging from BSA and IT Security to Fair Lending and Enterprise Risk. Don’t forget AffirmX can be tailored to meet the needs of your credit union including offering individual audits – such as BSA Independent Review, Annual ACH Independent Audit, Annual SAFE Act Independent Audit and Website Compliance Review. For Questions, a free demo or pricing – contact Amy Kleinschmit at akleinschmit@dakcu.org.
Compliance Update with Amy K
by Amy Kleinschmit, Chief Compliance Officer
ACH Rules Effective June 30
Two NACHA rules are effective at the end of the month which relate to warranty claims and reversals. With regard to warranty claims, NACHA’s final rule will limit the length of time in which an RDFI will be permitted to make a claim against the ODFI’s authorization warranty. More information, including FAQs, can be found here. Note that the effective date applies to an RDFI’s ability to make a claim, and not to the settlement dates of entries.
NACHA’s reversal final rule, which can be found here addresses improper uses of reversals and establishes formatting requirements for reversals. It also expands the permissible reasons for a reversal to include a “wrong date” error: 1) the reversal of a debit Entry that was for a date earlier than intended by the Originator; or 2) a credit Entry that was for a date later than intended by the Originator.
NCUA Request for Comment - NOL
The National Credit Union Administration (NCUA) is seeking feedback on its policy for setting the Normal Operations Level (NOL). The request for comment can be found here and comments must be received by July 26, 2021.
Normal operating level means an equity ratio not less than 1.2 percent and not more than 1.5 percent, as established by action of the NCUA Board. As explained in the discussion of the request for comments, “the current economic landscape and pending events related to the corporate asset management estates and NGN Program warrant a re-evaluation of the current Normal Operating Level policy. The current policy objectives include ensuring the Insurance Fund can withstand a moderate recession without the equity ratio declining below 1.2 percent over a five-year period. The economic conditions posed by the pandemic, including industry-wide, unprecedented share growth resulted in an equity ratio of 1.26 percent as of December 31, 2020. These issues have forced the NCUA to consider the ongoing feasibility of using a moderate recession and a five year performance period as the basis for stressing the equity needs of the Insurance Fund.”
The NCUA proposed nine questions in its request for comment, however, it is also encouraging comments on any other relevant issues that the NCUA Board should consider.
A few of the proposed questions include:
Should a moderate recession be the basis for evaluating the Insurance Fund performance during an economic downturn, or should the NCUA change the policy to consider a severe recession?
What data source(s) should the NCUA use for determining the characteristics of a potential moderate or severe recession - the Federal Reserve scenario, an independent source, or the NCUA’s judgment?
Should the NCUA continue modeling the performance of the Insurance Fund over a five year period or a longer or shorter period?
How should the NCUA utilize the modeled potential decline in value of the Insurance Fund’s claims on the corporate asset management estates going forward until the estates are fully resolved?
FTC Warning on Scammers
The Federal Trade Commission (FTC) recently posted this blog “More money is coming to families…and scammers are ready.” The article contains good reminders to help protect members.
Only the IRS will be sending these payments from the American Rescue Plan Act. Anyone trying to “help” you get your child tax credit is really after your money.
The government will NEVER call, text, email, or DM you out of the blue, asking for money or information. Keep your money — and your Social Security, bank account, debit and credit card numbers — to yourself.
Nobody legit will ever demand that you pay by gift card, wire transfer through companies like Money Gram or Western Union, or cryptocurrency. That’s a scam, every time.
CU Policy Pro
The new CU Policy Pro system has launched. Here is a list of FAQs regarding this new platform - CU PolicyPro New System FAQs.pdf
Also – be sure to check out the series of live webinars to introduce you to (or reacquaint you with) CU PolicyPro. The webinar sessions are FREE, but registration is required. Please click here to find a listing of available webinars. All webinars will be recorded and added to the Support area of CU PolicyPro for on-demand viewing. The first webinar in the series, All About Policies, is now available for viewing!
AffirmX
What can help your credit union meet compliance challenges in a proactive and cost-efficient manner? Please take a three-minute break from reading and learn how AffirmX can help you: http://youtu.be/27TLDXcjETE.
AffirmX Risk Intel Center helps credit unions adhere to government regulations through a patented, cloud-based platform that is customized and branded for your institution.
The platform draws on internal and external data sources to develop risk-based priorities to help you quickly identify issues, reduce costs, and streamline compliance management practices.
Unlike checklist-based systems that place the burden for understanding compliance requirements on your team, Risk Intel Center combines easy-to-use workflows with expert analysis and a risk-based dashboard to help your team stay on top of compliance issues ranging from BSA and IT Security to Fair Lending and Enterprise Risk.
Don’t forget AffirmX can be tailored to meet the needs of your credit union including offering individual audits – such as BSA Independent Review, Annual ACH Independent Audit, Annual SAFE Act Independent Audit and Website Compliance Review.
For Questions, a free demo or pricing – contact Amy Kleinschmit at akleinschmit@dakcu.org.