Compliance: The Department of No?
Help staff to better understand that the compliance department's job is to protect the credit union and its members.
How can you count the number and scale of hurdles credit union compliance professionals face on a daily basis? It’s nearly impossible. But despite the deluge of regulation changes by numerous governing bodies, reporting deadlines and a whole host of other external pressures, sometimes the biggest obstacles come from inside our own organizations.
Why is that? In my experience, it’s a matter of reputation. Sadly, it’s common for other areas of the credit union to view the compliance department as the “Department of No.” Can this ACH transaction go through? Compliance says no. We’re looking to launch a new mobile payment app – do we have everyone’s blessing? Compliance says no. Do we have all of the components we need to complete this vendor review? Compliance says no. The compliance director is calling … oh no.
See what I mean? These are daily activities for various credit union staff and compliance has a hand in it all, but we’re frequently thought of as the Debbie Downers who put a halt on many projects. That’s not what we’re here for. In reality, our jobs are to act as checkpoints to make sure all Is are dotted and Ts are crossed. That’s what compliance is for – to ensure that requirements are being met so that the credit union doesn’t suffer detrimental monetary and reputational consequences.
The goal is to overcome that stereotype and reverse this perception of the compliance department. We’re not the “Department of No,” but rather, the department of fulfillment, to help guarantee that projects and daily tasks are executed with all regulatory concerns considered and satisfied.
The trick is finding ways to break the barriers that often lead to “no.” Here are a few ways to do that:
1. Get buy-in from the top down. When the leaders of the credit union view compliance as necessary and something that actually matters (not merely something to appease the many governing bodies we follow), there is a trickle-down effect that permeates the entire organization. We need to demonstrate the importance of compliance, so it’s not seen as just a cost or necessity. On the contrary, compliance is integral in preserving the financial, reputational and operational integrity of the credit union. This mindset starts with the C-suite, funnels down to middle management and eventually engages all employees, board members and volunteers, so that everyone can recognize the true value of compliance.
2. Create an environment of comfort with compliance. One of the many issues people have with compliance is the complexity. What’s reportable and what isn’t? Have the rules on ACH payments changed again? When was the Specially Designated Nationals list last updated? All these questions signify one thing: A staff that is second guessing how regulatory requirements impact their daily tasks. And when people are uncomfortable, it breeds tension. So, it might be an unwritten job duty of the compliance department, but part of our role is easing those tensions for fellow staff through education. Help them through their compliance hurdles and explain the “why” behind them. This will empower staff to feel more knowledgeable and confident, even those who aren’t always in the compliance space. The more comfortable employees feel, the better they’ll feel about interactions with your department.
3. Get a seat at the table for product and policy decisions. It seems obvious – considering the compliance ramifications at the beginning of any new project or proposed policy makes the most sense. Why would you want to implement an entirely new product or procedure and then have to make changes to it for compliance reasons after the fact? It’s counterintuitive and certainly less efficient. This is where the word “no” is much more accepted because decisionmakers are asking the big questions, and they want legitimate answers. Therefore, compliance should always have a seat at the table when decisions are being made. Preventing the credit union from having to backtrack and make mitigations saves a lot of time, money and resources in the long run.
4. Reward positive compliance-related actions. From something as small as a shout-out via email to more elaborate rewards, such as naming a monthly compliance award recipient, people will appreciate the recognition for their role in compliance management. Not only that, but it will build better relationships between the compliance team and other departments within the organization. Here are a few situations where compliance rewards are warranted: Denying a suspicious loan application, helping a member avoid a scam, questioning an unusual check deposit, identifying compromised business emails or completing a Suspicious Activity Report that aids in law enforcement action – among so many others. Just remember not to reveal any identifiable information when sharing your good news, of course.
Like most things in the credit union movement, compliance is a collaborative effort among an institution’s entire staff. Once everyone comes to that realization, they’ll be far less likely to interact with frustration, annoyance and pushback. Instead, they’ll change their outlook on compliance staff and, instead of automatically being labeled the “Department of No,” there will be a greater understanding that our job is to protect the credit union and the members we serve.
Cindy Hagan Compliance and Fraud Risk Director Vizo Financial Corporate Credit Union Greensboro, N.C.