NAFCU Compliance Blog

DOL Offers Free Webcast on ERISA; NCUA Newsletter Available

The Department of Labor is offering a free two-hour webcast on ERISA issues this Thursday.  You can read all about it (and sign up) here.  You may want to pass this along to whomever runs your credit union's benefits program.

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NCUA has released its September 2008 newsletter.  You can access it here.  While the newsletters are not usually detail-heavy, I find them to be a good, concise read to highlight agency actions.

NCUA Issues Final IRPS on Section 205(d)

Yesterday, NCUA issued IRPS 08-1, an IRPS that does...well, I'll allow NCUA to explain.

Section 205(d) of the FCU Act prohibits a person who has been convicted of any criminal offense involving dishonesty or breach of trust, or who has entered into a pretrial diversion or similar program in connection with a prosecution for such offense, from participating in the affairs of an insured credit union except with the prior written consent of the NCUA Board. This IRPS provides direction and guidance to federally-insured credit unions and those persons who may be affected by Section 205(d) because of a prior criminal conviction or pretrial diversion program participation by describing the actions that are prohibited under the statute and establishing the procedures for applying for NCUA Board consent on a case-by-case basis.

You can access the IRPS here.  It is a fairly quick read.  But it is a must read for your HR department.   And if you're a compliance officer, I'd give it a read as well.

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The Compliance Guy is looking at a weekend of minor league baseball, family, friends and barbecue.  I hope you have as much fun as I plan on having.  Have a great weekend, everyone.

CU Benefits for CUSO Employees; Bachelor Party

This week, NCUA issued NCUA Legal Opinion 08-0218 (April 4, 2008), which addresses whether a credit union may provide HR benefits for CUSO employees, or in the alternative, manage the benefits if the CUSO pays the costs.  NCUA indicated the following:

You have asked if a federal credit union (FCU) may provide employee benefits to the employees of a CUSO that is wholly-owned or majority-owned by the FCU. You specify that by “provide,” you mean obtain, administer and pay for the benefits. No, that is not permissible. You also have asked, in the alternative, if the FCU may obtain and administer benefits for the CUSO employees if the CUSO pays for them. Yes, this is permissible subject to the conditions discussed below.

An FCU is authorized to provide employee benefits, including retirement benefits, to its employees and officers. 12 C.F.R. §701.19(a). The kind and amount of these benefits must be reasonable given the FCU’s size, financial condition, and the duties of the employees. Id. This authority is expressly limited to the FCU’s employees. It does not extend to the employees of a CUSO, which is a legal entity separate and distinct from the FCU, even if wholly-owned or majority-owned by the FCU. Also, an FCU may provide employee benefits to an FCU employee, who also performs some duties for a CUSO, but only for the duties that employee performs for the FCU.

We believe, as you suggest, that an FCU may obtain and administer employee benefits for CUSO employees, as part of a program for its own employees, if the FCUA does not pay for the benefits for CUSO employees and subject to certain conditions. By “obtain and administer,” you mean the FCU will combine CUSO employees with FCU employees to form a larger employee group solely for administrative convenience and as a cost savings measure to obtain better rates as a result of having a larger group of beneficiaries.

NCUA went on to clarify that if the credit union obtains and administers employee benefits for CUSO employees as noted above, the credit union must take steps to ensure the practice does not alter the legal separateness of the credit union and the CUSO.

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This weekend, the Compliance Guy is off to Pittsburgh for his bachelor party.  The plan is to watch as much baseball as possible (the Pirates take on the Phillies), eat poorly (Fatheads and Churchbrew), and try not to end up in the Ohio, Allegheny or Monongahela Rivers.  I should easily accomplish two out of three goals.

Have a great weekend, everyone!

Prohibition Orders; Wish them luck

Last week, NCUA issued two prohibition orders against individuals.  You can access a press release about it here.   

This makes me think of a good analogy that a good friend and security expert gave me once.  He indicated that some credit unions build their security systems much like the castles of old.  The walls are thick and heavily manned.  But if you can get through the wall, there is little security to monitor what happens inside.

These prohibition orders are a good reminder that credit unions should focus their security programs on external and internal threats. 

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Can you feel it?  The stress?  The anxiety?  That's right - today marks the beginning of the 2008 NAFCU Regulatory Compliance School!  More than 120 compliance professionals are rolling up there sleeves, sucking down some coffee, and learning about the credit union regulatory environment.  They have five jam-packed days ahead of them.  For you NCCO's out there, you know what they are going through.  Wish them well!

Background checks for employees; Run, Tom, Run

Garen Dodge penned this article on what employers should think about when conducting background checks for employees.  There's some interesting stuff in here, such as:

However, the FCRA does not apply if the employer conducts background checks internally - such as where interviews are conducted directly by employees of the human resources department. For example, a reference verified by the employer - rather than by an outside company retained for this purpose - is not subject to the statute.

The article does a nice job of walking through all the relevant legal issues.   Good stuff, people.  Good stuff.

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The Compliance Guy was watching a film with Tom Cruise this weekend.  In the movie, Tom Cruise spent some time running at full speed.  Which movie, you may ask?  It doesn't matter.  I challenge you to think of a movie in which Mr. Cruise does not sprint at some point.  Seriously.  Just try it.

Does your credit union have a blog policy?

I write a blog for NAFCU.  I have friends in the business that write blogs.  Everyone seems to have a blog.   Importantly though, does anyone in your credit union write a blog?  And do you have a policy that addresses it?

Here's a good article published in the Metropolitan Corporate Counsel that discusses the benefits of having a workplace blog policy.  The article notes that people blog about anything and everything.  Such as...

"(I)magine a blogger spreading completely speculative rumors that a recently promoted colleague got the job by performing sexual favors for the boss. Conversation that shouldn't go unaddressed in the workplace can be extremely difficult to curb when it occurs anonymously in cyberspace."

Or how about this?

"Imagine an employee with a disability who is accommodated with a modified work schedule in compliance with the Americans with Disabilities Act. The employer has properly responded to inquiries about the arrangement by saying only that the company is handling the individual's situation in accordance with federal law. A blogger complains that the 'slacker' is being allowed to come and go as he pleases while the rest of the department suffers for it and speculates about the person's possible medical condition."

Ultimately, the decision on whether to have such a policy is a business decision.  The article, however, is a useful read that may get you thinking.