This and That

Posted by Anthony Demangone

So many compliance issues, so little time!

Flood insurance.  The FDIC issued a nice Financial Institution Letter highlighting responsibilities of institutions during a lapse in the National Flood Insurance Plan. Sure, the FDIC does not regulate credit unions, but the guidance should be useful.  And speaking of flood insurance, Rep. Barney Frank has proposed legislation that would extend the NFIP through the end of September 2010. The NFIP will lapse at the end of this month unless Congress acts to extend the program. 

NCUA prohibition orders. NCUA recently issued three prohibition orders against individual who worked (notice the past tense) at federally insured credit unions. The prohibition orders can help trainers drive home the following two points:

1. There is a need for strong internal controls and audit functions, as there are people who will rip off credit unions from the inside if they think they can get away with it;
2. The prohibition orders can act as a deterrent, as they show that there are consequences.  The orders show that people are watching.  

Credit Card Act - Report.  The Credit CARD Act required the FTC to study the feasibility of ATM emergency systems that could help consumers alert authorities when a crime takes place at an ATM.  When I saw the requirement of the study, it caught my attention. If the report concluded that such systems would be the bee's knees, there could be a drive to upgrade ATMs throughout the country.  And that could be costly.  Well, here's the study.  The study indicates that there isn't much data on this issue.  But it concludes that such "alert systems" likely would not deter crime, the systems might increase the likelihood of injury to the consumer who used such a system, and that the implementation of such a system on ATMs would be cost-prohibitive.  Well, that's that.