By The Way

The By The Way newsletter is a great way to keep Kentucky credit unions informed of the latest updates in governmental affairs, compliance and regulations, education and training.  In addition, By the Way highlights the difference credit unions are making on a daily basis.

League News

CUNA Annoucements

Education Opportunities

Featured Article

Credit Union News

Compliance Updates


Southeast CUNA Management School Scholarship Recipient

We are pleased to announce that a recipient has been awarded a scholarship to the Southeast CUNA Management School in Athens, GA. 

Congratulations to Lindsay Cottner of Jefferson County Federal Credit Union!  Linsday has been with Jefferson County FCU for over 10 years as the Vice President of Accounting.

Scholarships are awarded on the basis of future potential and involvement in the credit union movement.  Awarded by the Kentucky Credit Union League (KCUL) and Southeast Regional Credit Union Schools (SRCUS), this scholarship will go towards tuition to attend the Southeast CUNA Management School for 2017. 

If you are interested in learning more about SRCUS, or would like to apply for a scholarship, please contact This email address is being protected from spambots. You need JavaScript enabled to view it. .  Download the scholarship guidelines and application at



Campaign for Common-Sense Regulation

The second video for the bipartisan, pro-consumer Campaign for Common-Sense Regulation campaign was released earlier this month. CUNA officially rolled out "Government let us down - is it too late to say sorry now?" on their social channels.

Please make sure to include the video in your upcoming member communications, and urge your advocates to post on their social media networks using #CommonSenseReg.

The campaign continues to gain steam.  Over 10,000 individuals have gone to CUNA’s Campaign For Common-Sense Regulation website.  On this website, you can learn more about the issue, watched videos, or contact your Member of Congress via email or social media.  Check it out!



CUNA Awards

Administered by the Kentucky Credit Union League & Affiliates and CUNA, the Louise Herring, Dora Maxwell and Alphonse Desjardins awards programs are a wonderful way for credit unions to showcase all the great things they do for their members and their communities.

Louise Herring Award
The purpose of this award is to promote credit union philosophy by formally recognizing credit unions that demonstrate in an extraordinary way the practical application of that philosophy for their members.

Dora Maxwell Award
The purpose of this award is to promote social responsibility among credit unions by formally recognizing their community service achievements.

Alphonse Desjardins Award
Alphonse Desjardins was a credit union pioneer who was instrumental in forming the Canadian and U.S. credit union movements. Besides helping to found the first credit unions in Canada and the U.S., Desjardins pioneered youth savings clubs and in-school "banks", known as caisses scolaires. This award honors leadership within the credit union movement on behalf of youth and adult financial literacy.

In an effort to streamline the submission process for our member credit unions and to reduce financial and human resources spent on the submission process, CUNA and the Leagues have collaborated to produce one standardized format and online submission process for our member credit unions.

Submission Instructions
You will automatically establish an account when you create an application to submit your first project by clicking on the designated link below. You may save your work and return to the submission site as often as needed as long as you complete and submit all parts of the project submission by the due date of June 30, 2017. State winners will advance to national competition for judging.

KY Homepage

KY Louise Herring

KY Dora Maxwell

KY Desjardins

If you have any questions you can contact Vicki Hall at the League office at 502-855-8202 or This email address is being protected from spambots. You need JavaScript enabled to view it. .


Triple Crown Compliance

Do you have what it takes to attend all THREE Compliance events?


BSA Training – Coming to a Location Near You!

The Bank Secrecy Act/Anti-Money Laundering Program (BSA/AML) is not just about Currency Transaction Reports and Suspicious Activity Reports. A financial institution's BSA/AML Program is now a depiction of how you do business and what is expected in the future. The BSA/AML Program is a living document and will change as your business changes.

MAY 23
Kentucky Credit Union League
3615 Newburg Road
Louisville, KY 40218



MAY 24
Holiday Inn Owensboro Riverfront
701 W 1st Street
Owensboro, KY 42301



MAY 25
La Quinta Inn & Suites Paducah
3960 Coleman Crossing Circle
Paducah, KY 42001


BSA/AML Update for Compliance Officers
3:00 p.m. - 5:00 p.m.

  • Common violations occurring in 2017
  • Member Business Accounts - Do they meet the definition of legal entity?
  • Overview of BSA/AML Aries Questionnaire
  • Deep-dive into policy requirements
  • Be audit ready

This interactive session will bring you up to date with the latest BSA information to include FinCen's Customer Due Diligence final rule for Business Legal Entities. In addition, a review of examiner focus and departmental specific training will be covered.

BSA/AML for Volunteers
7:00 p.m. - 8:00 p.m.

  • Policy requirements
  • FinCen expectations
  • CDD and Member Business Accounts
  • Cost of non-compliance

Boards of Directors must have adequate BSA/AML training in order to understand the requirements, the risks and the ramifications of noncompliance. This session is intended to give Volunteers an overview of Directors' responsibilities, general requirements and the most updated information.

BSA/AML for Frontline Employees
6:00 p.m. - 7:00 p.m.

  • BSA History/Timeline of Events
  • Requirements of the BSA Program
  • Currency Transaction Reports (CTR)
  • Suspicious Activity Reports (SAR)
  • Filing Timelines & Record Retention
  • Monetary Instruments
  • USA Patriot Act
  • Customer Identification Program Requirements
  • Office of Foreign Assets Control (OFAC)
  • Penalties for Non-compliance

This training is perfect for frontline employees, new accounts personnel, lenders & back office employees. The information presented will train employees on specific information of the Bank Secrecy Act which directly affects their position/title. In order to be in compliance with this regulation, you must give training to your entire staff annually. This BSA training opportunity will meet your training compliance requirement.

ONLY $199 per Credit Union



Price includes unlimited attendees from each registered credit union and program materials.




8 Hour SAFE Comprehensive 2017 MLO Course #6833 (NMLS #1405021)

Kentucky Credit Union Leaguenmls 6833
3615 Newburg Road
Louisville, KY 40218

Educational Investment: $239 per person

Registration 8:00 a.m.
Course 8:30 a.m. - 5:20 p.m.
Final Exam 5:20 p.m.



Course Purpose:
Section 1026.36(f)(3)(iii) of Regulation Z (the Truth in Lending Act) requires that loan originators receive periodic training covering Federal and state law requirements that apply to the individual loan originator's loan origination activities. Training that has been approved by the NMLS satisfies this periodic training requirement. This course meets the functional specifications and administrative standards required of an NMLS approved course.

Course Description:
This course is titled "8 Hour SAFE Comprehensive 2017 MLO Course #6833." Through lecture, interactive exercises, case studies and class discussion, participants will learn the following:

  • Federal Law and Regulations 
    • Truth in Lending Act / Regulation Z
    • Real Estate Settlement Procedures Act / Regulation X
    • Equal Credit Opportunity Act/Regulation B
    • Fair Credit Reporting Act / Regulation V 
    • NCUA Part 722: Appraisals
    • NCUA Part 760: Flood Insurance
  • Ethics, Consumer Protection and Fair Lending 
    • Equal Credit Opportunity Act / Regulation B 
    • Fair Housing Act 
    • Home Mortgage Disclosure Act  
    • Servicemember’s Civil Relief Act 
    • Military Lending Act
    • Unfair, Deceptive and Abusive Acts and Practices
  • Lending Standards for the Non-Traditional Mortgage Market
    • Adjustable Rate Mortgages
    • Higher Priced Mortgage Loans
    • High-Cost Mortgages
    • Private Mortgage Insurance
    • Home Equity Lines of Credit
  • Undefined Mortgage Instruction 
    • Proposed Amendments to the Integrated Disclosure Rule
    • Upcoming Changes to the Home Mortgage Disclosure Act
    • Amendments to the Mortgage Servicing Rules
    • Appendix Q: Standards for Determining Monthly Debt and Income



For additional information regarding CUNA's mortgage loan originator training, please contact Tracy Blaske, CUNA's Director of Compliance Education at 608-231-4030 or This email address is being protected from spambots. You need JavaScript enabled to view it. . MLO testing optional. Attendees will not be eligible for Safe Harbor Protection if not testing.


Compliance Mini-Workshop

May 23 | Louisville, KY

Kentucky Credit Union League
3615 Newburg Road
Louisville, KY 40218
Time: 10:00 a.m. - 2:00 p.m.

Educational Investment: $79 (includes lunch)


The new phase of HMDA
Data seems to be playing a bigger role in everything we do, and that includes compliance. You see it in the new HMDA requirements that go into effect January 1st of 2018. The HMDA data set is more than doubling, and that means there is that much more information for the regulators to look at. Are you prepared?

During this session you will:

  • Learn about the changes that go into effect starting next year
  • Have a better understanding of the new data points that will be required
  • Come away with ideas for implementing the changes necessary within your credit union

Military Lending Act
Most provisions of MLA took effect Oct. 3, 2016. The provision related to credit cards takes effect Oct. 3, 2017. The regulation provides certain protection for service members and their families. Are you in compliance?

During the session you will:

  • Review scope of the rule
  • Learn how to identify covered borrowers
  • Revisit oral disclosures requirements
  • Identify the differences between the MLA and Servicemembers Civil Relief Act
  • Review compliance FAQs

CFPB's 2016 New Mortgage Servicing Rules
In Aug. 2016 the Consumer Financial Protection Bureau issued a final rule (2016 Mortgage Servicing Rule) amending certain mortgage servicing provisions in Regulation X and Regulation Z. Concurrently with the issuance of the 2016 Mortgage Servicing Rule, the Bureau issued an interpretive rule under the Fair Debt Collection Practices Act (FDCPA), relating to servicers' compliance with certain mortgage servicing provisions as amended by the 2016 Mortgage Servicing Rule.

During the session you will review:

  • Successors in Interest
  • Periodic statements for borrowers in Bankruptcy
  • Loss mitigation
  • Early intervention
  • Small servicer exemptions


July 25-26, 2017 | Louisville, KY

Kentucky Credit Union League
3615 Newburg Road
Louisville, KY 40218

Educational Investment:  $379 (includes materials and lunch)

Registration is not yet open.




brochure front WEB

2017 Volunteer Leaders Conference

August 11-13, 2017

Dollywood's DreamMore Resort
2525 DreamMore Way
Pigeon Forge, TN 37863


As a volunteer, no one is better positioned to affect the future of your credit union than you are. 
You have accepted a major responsibility in guiding your credit union.  Ongoing education is important
to reach the next level of challenge and opportunity.

Whether you're just getting started at your credit union, or you're a seasoned veteran, our conference
offers valuable learning opportunities to help sharpen your skills to make your leadership role more effective.

The conference is designed to help you understand changes in the credit union industry and recognize
challenges facing your credit union. We'll discuss the issues that are most important to you. In addition, 
you'll have plenty of opportunities to "network" with other volunteers from across the region, ask the
burning questions, and discover how you can more effectively serve your credit union and its members.

Scholarship Opportunities Available



Southeast CUNA Management School 

June 9-16, 2017 | Athens, GA

The Southeast CUNA Management School’s mission is to provide students with the skills and knowledge to meet the leadership challenges that arise in the credit union industry. For more information, please visit the Southeastern Regional Credit Union School web site.

Please plan to check-in at Conference Registration between 11:00 a.m. - 12:00 p.m. ET on Friday, June 9, 2017. Attendance at all scheduled activities is required for graduation. When making travel arrangements, please plan to depart UGA no earlier than 1:30 PM on Friday afternoon.

UGA Center for Continuing Education & Hotel
1197 South Lumpkin Street, Athens, GA 30602


  • Fee on or before 05/03/2017: $1,695
  • Fee after 05/03/2017: $1,895
  • Guest Banquet Ticket: $40 (only order if you plan to bring a guest – your registration fee already includes the banquet)

For more information, contact Tom McWilliams, CUDE, CMP, CCUE, MSCUA Senior VP This email address is being protected from spambots. You need JavaScript enabled to view it.  or 800-748-8627 ext. 310.



Southeast Regional Directors Conference

July 16-19, 2017
Beau Rivage Resort
Biloxi, MS


Join peers from credit union boards across the Southeast for two-and-a-half days of education designed for credit unions’ volunteer leaders. The 2017 Southeast Director’s Conference, set for July 16-19, 2017, features a full range of informative sessions on critical, timely issues, with first-rate speakers to address the economy, lending environment, and much more.

The Southeast Regional Directors’ Conference is designed for credit union directors and committee members. The conference location rotates among the ten Southeastern states, giving each state an opportunity to host their fellow credit union volunteers and showcase the best of what their state has to offer. This conference features a full range of informative educational sessions that provide a conduit for learning about critical issues important to today’s ever-changing financial industry.

For more information, contact Tom McWilliams, CUDE, CMP, CCUE, MSCUA Senior VP This email address is being protected from spambots. You need JavaScript enabled to view it.  or 800-748-8627 ext. 310.



Are Your BSA Procedures Up to Snuff?

by Bambi Helm, PolicyWorks LLC

Everyone knows credit unions must conduct independent BSA testing every 12-18 months. A credit union must consider their own size, complexity, and controls to determine if stretching out to 18 months makes sense. I recommend you also throw in a review of the results from your last three or four years’ tests to see if perhaps you should tighten up that window. One of the most common issues PolicyWorks sees when we conduct the independent testing is repeat findings. Year over year the same issues come up, and credit unions are not putting corrective action in place. If you see findings repeating themselves, take action and test again in 12 months to make sure new or enhanced controls are really working.

Waiting for the annual audit may be too late. We’ve compiled a list of the 10 most common findings from independent testing we conducted here at PolicyWorks over the last 14 months. We understand that credit union managers wear many different hats, so to assist you, I’m adding some recommendations for each finding that I think are practical and executable. Putting these controls in place will help keep your credit union compliant and efficient.

  1. Finding: Credit Unions do not properly identify when an MSB is part of their membership because procedures don’t include treating an agent as an MSB.
    Recommendation: Review your procedures, update your member due diligence procedures, and provide training to your employees. Depending on your size, this might take as little as one hour to fix.
  1. Finding: RSSD numbers are missing on CTRs and SARs.
    Recommendation: Review your procedures, update your CTR and SAR procedures, and provide training to your employees. One more hour.
  1. Finding: Credit Unions rely on a 3rd party to conduct OFAC checks for non-members participating in a wire transaction, usually through a system interface, that prevents wires from processing if there’s an OFAC hit. However, credit unions have not, or only periodically, validate the control is working.
    Recommendation: Periodically pull a sample of 10 wires and run the non-members through the OFAC Sanctions list. Keep a record, and show it to your examiner. This will probably take 30 minutes.
  1. Finding: Policies refer to various procedures (i.e. Identifying High Risk Members, OFAC screening of membership, etc.), yet when we ask credit unions to produce those procedures, the credit union doesn’t have them.
    Recommendation: Review your policies, make a list of missing procedures, and then create them. Make sure you provide refresher training to employees. Some credit unions are small enough that they don’t have robust written procedures. If that’s the case, and you have no findings, then update your policy to remove references to procedures that don’t exist. This will take some time, but is well worth it.
  1. Finding: Procedures include how to identify High Risk Members, but there is no procedure in place to identify when a High Risk member is no longer high risk and should be removed from your monitoring process.
    Recommendation: Review your procedures and add procedures to remove those high risk members when allowed. This will save you time in the long run, and perhaps avoid an embarrassing conversation with a member that could have been prevented.
  1. Finding: BSA Policy says training takes place every year, but it really doesn’t.
    Recommendation: Training is critical to the success of any compliance program. Get training materials created (or purchase them), keep logs that identify when training took place and who received it, and make sure you include your Board of Directors.
  1. Finding: OFAC checks are not documented at new account opening, membership cards are missing ID information, or fields just aren’t completed.
    Recommendation: Every month, pull 10 new accounts and verify CIP procedures are being followed and OFAC checks are completed. Coach your employees to make sure they are following procedures. Keeping on top of this will help prevent concerns later.
  1. Finding: FinCEN 314(a) reports are not being reviewed, or if they are, there is no documentation retained to support the credit union’s actions.
    Recommendation: Keep a record of each report and make notes about the actions taken.
  2. Finding: SARs are not being reported to the Board of Directors.
    Recommendation: Make sure you report high level information to the Board each month. The Board is ultimately responsible for ensuring BSA compliance. Make sure your Board is aware of SAR activity, or lack of it.

  1. Finding: BSA Policies have not been reviewed and approved by the Board every year.
    Recommendation: Put tasks on your calendar every year to ensure policies are reviewed, updated, and approved every year.

The common theme between these recommendations is to build your foundation, monitor it, and document your actions. I know it may seem daunting, but I believe in the KISS method. If you are small, lean, and don’t have IT folks at your beck and call to build cool systems and databases, then use a spreadsheet, delegate tasks so you can get things done faster, and inspect what you expect! When an independent auditor identifies issues, take action. PolicyWorks is here to help if you need it. Believe me, we love issuing a report with little to no findings.

As Director of Audit Services, Bambi Helm oversees the end-to-end delivery of compliance audits and reviews to credit union clients, ensuring the audit programs are current, consistent, and efficient.


L&N Federal CU Takes Top Honors in 2017 Best Places to Work

During the Thirteenth Annual Best Places to Work in Kentucky awards ceremony, nearly 1,300 attendees joined in celebrating the 100 Kentucky companies who were recognized for their commitment to focus, measure and move their workplace environments toward excellence.

Winners from across the state have been selected in three categories: small companies of 15-149 employees, medium companies of 150-499 employees and large companies consisting of more than 500 employees (categories based on number of U.S. employees, only Kentucky employees surveyed). The selection process, managed by Best Companies Group, is based on an assessment of the company’s employee policies and procedures and the results of an internal employee survey.

L&N Federal Credit Union was ranked first place in the 2017 Best Places to Work in Kentucky by the Kentucky Chamber of Commerce and the Kentucky Society for Human Resource Management (KYSHRM) in the medium category.

“We are incredibly grateful to our employees, members and volunteers for making L&N a great place to be!” said Gary Lord, President & CEO. 




Commonwealth CU Partners with Local Church in Pay Day Lending Program

Commonwealth CU has partnered with First Baptist Church in Frankfort to offer a low interest rate lending program that caters to borrowers who are caught in the cycle of payday loans. Payday lenders often charge up to 400 percent in interest, making it impossible to pay off a loan.

The Pay Day Lending program seeks to break this perpetual cycle of borrowing, and offers a chance for the borrower to improve his or her financial situation. Introduced on February 1st, potential candidates must first undergo a screening by First Baptist Church. Once approved, candidates are referred to Commonwealth CU for a loan. The 12-month loan is secured by the church—with low interest rate and low payment.



Commonwealth CU Holds First Realtor Open House in ShelbyvilleCCU Realtor Open House1

To boost their footprint in the mortgage lending market in Shelby and surrounding counties, Commonwealth CU hosted the 1st Shelbyville Realtor Open House on March 21st at the branch office on Boone Station Road.

Representatives from local realty companies in Shelby, Spencer and Jefferson counties were met by the Shelbyville Branch team led by Branch Manager Dana Robinson (first row, second from left) and Mortgage Loan Originator Bonita Kelley (front row, second from right). Also on hand for the event were Melissa Botkins (far right), Mortgage Department Manager, and Jonathan Mays (back row, far right), Vice President of Mortgage.




Shoes for Paws Fundraising Campaign Extended to May 15 ShoeforPaws

Pictured are Gail Gottshall, Fort Knox Federal Credit Union Danville Branch Manager, and “Dal,” the Dalmatian mascot for the Danville-Boyle County Humane Society, encouraging everyone to donate used shoes to the ‘Shoes for Paws’ campaign.  The money raised will help build the Humane Society’s new kennel building.  Donated shoes are sold by the pound to support micro-enterprise small businesses in developing nations. One of the donation drop-off locations is the Danville Branch of Fort Knox Federal at 312 Skywatch Drive. 







Fort Knox Federal Sponsors Inspire Women Conference

The Central Kentucky Community Foundation’s Initiative, “Heels Together,” will host the 2017 Inspire Women Conference at the Early College and Career Center, 200 University Drive, in Elizabethtown from 8:30 a.m. to 12 noon on April 22nd.   Fort Knox Federal Credit Union is the conference Presenting Sponsor.

The Heels Together initiative, a program of the Central Kentucky Community Foundation, is led by community spirited women and funded by people who value and want to be part of women-led solutions for women and girls.  This conference is for all women, high school aged and above, who want to be challenged to create brighter futures for themselves and those around them. 

“Fort Knox Federal Credit Union is proud to make this conference available free to our local community.  This is another example of Fort Knox Federal’s commitment to improve not only the financial lives of our members, but to also improve the quality of life in the communities we serve,” said Rebecca Ates, Executive Vice President. 

The keynote speaker will be Dr. Joy Jones, a writer/researcher, motivational speaker, and trainer in the field of communication.  For more than 20 years, she has provided communications training for businesses and corporations such as Oregon Association of Realtors, New Jersey Prosecutors’ Offices, and South Jersey Industries.  She holds a PhD in Organizational Leadership, and serves as an Assistant Professor of Communication at Atlantic Cape Community College, as well as a lecturer at Rutgers University.

A Kentucky native, Joy provides a complete range of communication services, including: executive, leadership, or communication coaching; corporate training; interpersonal communication coaching; relationship communication coaching; keynote speaking; and writing/researching.

The conference will also feature breakout sessions focusing on Stress Management, Interpersonal Communication and a Food Journey.

Inspire Women was founded in 2003 to provide mentorship, support and investment to women looking to unlock their potential.  Since its founding, the organization has raised millions of dollars to invest in scholarships, grants and support for women of all races and economic backgrounds.

Through its Leadership Academy, inner circles, citywide events and, most importantly, working directly with women around the world, the organization invests in and helps women find their spark to follow their dreams.

Details and registration information about the conference are available online at:



Operation Purple CowOperationPurpleCow1

Fort Knox Federal Credit Union Bardstown branch managers Sandra Cunningham (left) and Danelle Morales met with Thomas Nelson High School students during Operation Purple Cow, a job interview program, on 4/18/17. 

The mock interviews are to help students prepare for the real thing when they enter the work world.  Fort Knox Federal actively supports financial literacy programs through public schools in areas the Credit Union serves.







Fort Knox Federal Names Marc Prasch Vice President of Retail Operations

Marc PraschFort Knox Federal Credit Union announced the appointment of Marc Prasch as Vice President of Retail Operations.  Marc will be in charge of all branch operations, the Member Resources call center and retail operations support team.

Prior to joining Fort Knox Federal, Marc had a distinguished career in retail banking that spanned 22 years.  He started at Bank One (which later became Chase Bank) in the 1990s and then moved to First Federal Savings Bank as a branch manager.  He was promoted to Vice President of Sales in 2006 and was eventually promoted to Senior Vice President of Retail Banking at First Federal were he supervised 17 branches and the call center.  

Marc also has expertise in sales training and sales coaching programs, in addition, he has vast experience in working with branch operations and branch compliance.  And he comes to the Credit Union with 20 years of experience in consumer and real estate lending.     

Immediately before coming to Fort Knox Federal, Marc served as Senior Vice President – Retail Operations at First Capital Bank in Louisville since 2015.  At First Capital, he managed eight branches and the bank’s training program. 

Marc is well known in the community as an active volunteer.  He was the United Way Board Chair and Campaign Chair in Bullitt County in 2015. 

He has a bachelor’s of business degree and certifications from the Kentucky Bankers Association Banking School, Disney Institute and John Maxwell Leadership programs. 

Marc and his family live in Shepherdsville.



Notice of Funding Opportunity Expected May 1

On May 1, NCUA expects to release a Notice of Funding Opportunity for the 2017 round of grants funded by the Community Development Revolving Loan Fund. Subject to available funds, NCUA anticipates opening the funding round in June. Funding availability for 2017 is pending congressional budget approval. Additional details will be announced in a future issue as they become available.

Learn about NCUA's revolving loan fund that also offers grants.



NCUA Field-of-Membership Rule

Get more information about the NCUA’ new field-of-membership rule by watching the agency’s webinar online and review questions and answers from the event.

The NCUA Board unanimously approved the new field-of-membership rule at its October 2016 open meeting.



CFPB Finalizes 6-Month Prepaid Rule Delay

The CFPB released a final rule delaying the general effective date of the agency's prepaid rule by six months. The rule will now take effect on April 1, 2018 rather than October 1, 2017.

The CFPB also decided to revisit at least two substantive issues in the prepaid accounts rule through a separate notice and comment rulemaking process. The agency expects to release that proposal in the coming weeks.

Those two issues relate to: 

  • The linking of credit cards to digital wallets that are capable of storing funds; and
  • Error resolution and limitations on liability for prepaid accounts that cannot be registered, have not yet been registered, or for which consumers have attempted but have not successfully completed the registration process. 

The CFPB continues to evaluate other industry and stakeholder concerns and may address "a limited number of other topics" in the proposal as well. Click here for the press release and here for the final rule.



New CUNA Compliance Resource! HMDA Data Collection Flow Chart

In October 2015 the Consumer Financial Protection Bureau finalized amendments to the Home Mortgage Disclosure Act ("HMDA"). Among these were modifications to the government monitoring information ("GMI") data collection requirements found in Appendix B to Regulation C.

In summary, Appendix B now contains very specific instructions on how a credit union must collect and report GMI about a HMDA reportable transaction. This includes procedures for both face-to-face as well as telephone, mail and online applications. In addition, Appendix B also now provides for both aggregated and disaggregated categories of GMI.

To help credit unions navigate the new HMDA GMI requirements, CUNA's compliance team has developed a "HMDA GMI Collection" flow chart. This resource is available to CUNA member credit unions on the resource tab in the HMDA section of the E-Guide to Federal Laws and Regulations by clicking here. It is also available in the shared file library of CUNA's Compliance Community by clicking here.



Back 2 Basics: 5 Steps to Follow When You Receive a Garnishment Notice

1. Determine whether a "Right to Garnish Federal Benefits" is Attached

Prior to taking any other action related to a garnishment order, and no later than two business days after receiving the order, a credit union must review the order to determine if the United States or a State child support enforcement agency has attached or included a Notice of Right to Garnish Federal Benefits.

If such a notice is attached or included with the garnishment order, then the credit union must follow its customary procedures for handling garnishments. 

If no such notice is attached or included, then the credit union must perform an account review to determine whether the account holds any federal benefit payments, and if necessary, protect such federal benefit funds from garnishment. 

2. Perform a Federal Benefits Account Review.

No later than two business days following receipt of the order the credit union must perform an account review. 

In an account review the credit union will examine the deposits made into the account for the previous two-month period (the lookback period) to determine if a benefit agency has deposited a benefit payment into the account during that time. For example, the credit union receives a garnishment order on Wednesday, March 17 and begins the account review that same day. The lookback period begins on Tuesday, March 16 (the day preceding the beginning of the account review) and ends two months earlier, on January 16. 

If the account review shows that a benefit agency did not deposit a benefit payment into the account during the lookback period, then the credit union must follow its customary procedures for handling the garnishment order. 

If the account review shows that a benefit agency deposited a benefit payment into the account during the lookback period, then the credit union must protect the benefit funds as required by this regulation. (31 CFR Part 212—Garnishment Of Accounts Containing Federal Benefit Payments)

The credit union must perform an account review regardless of: 

(1) The presence of other funds, from whatever source, that may be commingled in the account with funds from a benefit payment;

(2) The existence of a co-owner on the account;

(3) The existence of benefit payments to multiple beneficiaries, and/or under multiple programs, deposited in the account;

(4) The balance in the account, provided the balance is above zero dollars on the date of account review;

(5) Instructions to the contrary in the order; or

(6) The nature of the debt or obligation underlying the order.

The credit union must perform the account review separately for each account in the name of an account holder named on the garnishment.

Click here to read the rest of the blog post.



New NACHA Bulletin Kicks Same Day ACH Planning Into High Gear

NACHA's rollout of Same Day ACH is proceeding to Phase 2, as Same Day debit capabilities will go live on September 15. In preparation for this milestone, NACHA has released a list of recommended action items to be performed in advance of September 15.

Most of these steps can be categorized as "hygiene," e.g., confirming the accuracy of Effective Entry Dates, and ensuring that third-party senders and software vendors are adhering to proper practices. However, one of NACHA's messages is worthy of emphasis: "Even those not planning to use same-day processing for ACH debits should take reasonable care to prevent unintentional same-day ACH debits."

The September 2016 Phase 1 rollout of same day ACH credits went extremely smoothly, with no reports of significant operational issues and more than $5 billion of monthly volume being processed. The September 2017 event will be more complex- greatly expanded use cases will likely lead to higher volume, while the process flow of ACH debits heightens the potential for the unintentional transactions NACHA notes above.

Network rules require that all financial institutions stand ready to receive same day ACH debits by September 15, even those that elect not to originate them.

A complete version of NACHA's bulletin is available here.



Compliance: Phase 2 of same-day ACH coming Sept. 15

The second phase of same day automated clearing house (ACH) rollout has a Sept. 15 effective date, and NACHA- The Electronic Payments Association has released a list of recommended action items to be performed before that date. All financial institutions must be prepared to receive same-day ACH debits by Sept. 15, even if not originating them.

NACHA emphasizes that “even those not planning to use same-day processing for ACH debits should take reasonable care to prevent unintentional same-day ACH debits."



NCUA-SBA Partnership Update

Credit unions may be missing out on some opportunities offered by the U.S. Small Business Administration (SBA).


SBA 7a

NCUA signed a Memorandum of Understanding with SBA in February 2015 to educate credit unions and promote the SBA's programs.  During the two years of that partnership, NCUA's Office of Small Credit Union Initiatives has hosted two webinars profiling SBA's programs: Balancing Loan Portfolios with SBA Guarantees in March 2015 and SBA Opportunities for Credit Unions in February 2017.  But as the saying goes, opportunity may knock, but it's up to you to open the door.

Learn about some SBA programs your credit union may want to consider.



ACH Operations Bulletin #2-2017:  Same Day ACH and Debit Processing

NACHA’s rollout of Same Day ACH is proceeding to Phase 2, as Same Day debit capabilities will go live on September 15. In preparation for this milestone, NACHA has released a list of recommended action items to be performed in advance of September 15.

Most of these steps can be categorized as “hygiene,” e.g., confirming the accuracy of Effective Entry Dates, and ensuring that third-party senders and software vendors are adhering to proper practices. However, one of NACHA’s messages is worthy of emphasis: “Even those not planning to use same-day processing for ACH debits should take reasonable care to prevent unintentional same-day ACH debits.”

The September 2016 Phase 1 rollout of same day ACH credits went extremely smoothly, with no reports of significant operational issues and more than $5 billion of monthly volume being processed. The September 2017 event will be more complex- greatly expanded use cases will likely lead to higher volume, while the process flow of ACH debits heightens the potential for the unintentional transactions NACHA notes above.

Network rules require that all financial institutions stand ready to receive same day ACH debits by September 15, even those that elect not to originate them.

A complete version of NACHA’s bulletin is available here.




CFPB Issues Proposed Rule to Amend HMDA

The CFPB issued a proposed rule to amend HMDA.  In the proposal, the Bureau is attempting to ease the implementation burden of the new HMDA rule with some clarifications of the existing rule.  These changes seem to be positive for the most part, as they mainly provide technical clarifications and corrections.  Key changes in the proposed rule include the following:

Transition Rules:  The proposal establishes for two of the data reporting points in the HMDA rule, loan purpose and the unique identifier for the loan originator.  The transition rules would permit financial institutions to report "not applicable" for these data points when reporting certain loans that they purchased that were originated before certain regulatory requirements took effect.

Key Terms:  The proposal also clarifies key terms such as "temporary financing" (for financing the construction of a home that will be financed through a more traditional means at a later time) and "automated underwriting system." 

Temporary Financing:

Section 1003.3(c)(3) provides that closed-end mortgage loans or open-end lines of credit obtained for temporary financing are excluded transactions.  The proposal would would clarify that temporary financing includes:

  • (1) a loan or line of credit that is designed to be replaced by separate permanent financing extended to the same borrower at a later time; and
  • (2) a construction-only loan or line of credit that is extended to a person exclusively to construct a dwelling for sale. 


Current § 1003.4(a)(35)(ii) provides that an AUS means an electronic tool developed by a securitizer, Federal government insurer, or Federal government guarantor that provides a result regarding the credit risk of the applicant and whether the covered loan is eligible to be originated, purchased, insured, or guaranteed by that securitizer, Federal government insurer, or Federal government guarantor.  The proposal more clearly defines who is a securitizer, insurer or guarantor for purposes of the definition and what constitutes a "covered loan." if the person who developed the tool has ever been a securitzer, Federal government insurer or Federal government guarantor of closed end mortgages or open end lines of credit that will satisfy the requirement.

Click here to read the blog post.



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